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It's a way of bandlimiting (lowpass filtering?) price change through mild overproduction. It works because overproducing food costs less than the risk of marke
by ArkyBeagle 10y ago
It's a way of bandlimiting (lowpass filtering?) price change through mild overproduction.
It works because overproducing food costs less than the risk of market shortage transients. It's one of those Catch-22 moments where you feel in awe of the genius of it.
I am very sorry it is a significant fraction of your state budget. Given the nature of the risk profile your state should not be underwriting this risk.
- kyllo 10y agoIn manufacturing terms it is a way of encouraging the use of inventory to buffer against demand volatility and reduce the probability of shortage events.