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So now the price will go up, and it'll be worthwhile growing mustard seeds again.

bell-cot 4y ago
Ah, no. You probably should talk to a real farmer about current crop prices vs. futures prices, the capital & other costs of trying to switch from growing Crop A to Crop B, lead times, inelastic demand, and how many farmers have been wiped out (bankruptcy & liquidation) due to a series of "it sounded good at the time" decisions.
- Dylan16807 4y ago
  They mean it in an average sense, not advice to particular farmers. It will make sense for some to switch, and some will.
hammock 4y ago
If the price increase weren’t due to a subsidy, that would be true. Instead, a subsidy creates a sustained shortage. Unless something else (not price action) increases the demand for mustard, its price will not move back to equilibrium. This concept is in Econ 101 (albeit one of the less intuitive concepts taught)
- Dylan16807 4y ago
  Well first off they didn't say the price will move back, they said the shortage will end. Now that it costs more, more supply can be obtained. But also it's likely that when the equilibrium point moved, farmers (or other parts of the supply chain) overshot it. That puts us in a price spike, so even if the new normal is higher than the old normal, if you check during a spike you should expect the price to go down.
  - GekkePrutser 4y ago
    I'm the OP and yes you explained what I meant to say very well. All foodstuff prices are going up now anyway. And tbh, mustard is like 0.1% of my food budget so if it goes up a bit or even triples in price I won't think twice about it. I just meant that this will force a new equilibrium, subsidy or not, people will keep growing mustard. And of course tackling climate change is also a big priority, and renewable fuels are a good option for things that can't be electric (e.g. planes).
nephanth 4y ago
In Burgundy (where Dijon is) at least, growing grapes for wine is probably way more profitable than mustard seeds
deleted 4y ago
[deleted]
bottled_poe 4y ago
Hmmm.. that’s not how supply vs demand works though
- SimplyUnknown 4y ago
  How so? Supply goes down while demand is the same --> Price goes up --> Profit margin for the farmer increases --> Profits of mustard > profits of rapeseed --> Farmer produces mustard instead of rapeseed. This is exactly the consequence of supply and demand. The only noteworthy fact is that we got in this situation because it was not a completely free market but a regulated market due to subsidies for rapeseed, artificially increasing their profit margin.
  - bottled_poe 4y ago
    Because demand isn’t the same. Changing the price affects the demand.
- viridian 4y ago
  This is exactly how a price shift in the supply demand curve works in basic macroeconomics. If you price shift a good upwards and the demand remains static, yield per good increases and then supply should increase as suppliers willing to supply at the new price is greater than supplier willing to supply at the old price.
  - bottled_poe 4y ago
    > demand remains static, How can this be an assumption? Of course demand will respond to price.
    - viridian 4y ago
      Demand is a slope, not a point. Price increases left shift demand, prices decreases right shift demand. This is because more people are willing to buy a good at a cheaper price than a more expensive one. In this context demand is the total desire of the market to consume that good at all, represented by a slope that has an inverse relationship with the price axis.
roenxi 4y ago
Which is cool and all, but the side effect of this all is less people would be able to eat mustard. Prices going up is often inevitable but hardly a win. It'd be interesting to have an accounting of what end-of-the-day benefits people got for giving up their mustard.
- beowulfey 4y ago
  It’s mustard, and there are still other kinds. I’m personally not worried about it. I think we’ll have a lot more of these sacrifices coming up in the next thirty years that will hurt a lot more. Coffee is the one that I’m most worried about.
  - jfim 4y ago
    The other kinds of mustard are not really substitutable. It's as if Coca Cola disappeared from store shelves in the US, and someone said it's fine because there's still Fanta and Sprite.
    - JasonFruit 4y ago
      I'm not really sure your analogy helps; in either case, there are people who would agree that it matters, and people who would be baffled that anyone could get wrought up over it.
      - hammock 4y ago
        Replace Coke and Sprite with Trump and Biden. Now we’re talking
      - bobthepanda 4y ago
        What makes the example unhelpful? Coca Cola and associated brands are probably one of, if not the most internationally prolific brands of consumer product in the world. I don’t even drink much soda now and even I remember what they tasted like years ago, or at least the fact that they taste wildly different.
    - deleted 4y ago

Ah, no. You probably should talk to a real farmer about current crop prices vs. futures prices, the capital & other costs of trying to switch from growing Crop A to Crop B, lead times, inelastic demand, and how many farmers have been wiped out (bankruptcy & liquidation) due to a series of "it sounded good at the time" decisions.

Dylan16807 4y ago
They mean it in an average sense, not advice to particular farmers. It will make sense for some to switch, and some will.

hammock 4y ago

If the price increase weren’t due to a subsidy, that would be true. Instead, a subsidy creates a sustained shortage. Unless something else (not price action) increases the demand for mustard, its price will not move back to equilibrium. This concept is in Econ 101 (albeit one of the less intuitive concepts taught)

Dylan16807 4y ago
Well first off they didn't say the price will move back, they said the shortage will end. Now that it costs more, more supply can be obtained. But also it's likely that when the equilibrium point moved, farmers (or other parts of the supply chain) overshot it. That puts us in a price spike, so even if the new normal is higher than the old normal, if you check during a spike you should expect the price to go down.
- GekkePrutser 4y ago
  I'm the OP and yes you explained what I meant to say very well. All foodstuff prices are going up now anyway. And tbh, mustard is like 0.1% of my food budget so if it goes up a bit or even triples in price I won't think twice about it. I just meant that this will force a new equilibrium, subsidy or not, people will keep growing mustard. And of course tackling climate change is also a big priority, and renewable fuels are a good option for things that can't be electric (e.g. planes).

nephanth 4y ago

In Burgundy (where Dijon is) at least, growing grapes for wine is probably way more profitable than mustard seeds

deleted 4y ago

[deleted]

bottled_poe 4y ago

Hmmm.. that’s not how supply vs demand works though

SimplyUnknown 4y ago
How so? Supply goes down while demand is the same --> Price goes up --> Profit margin for the farmer increases --> Profits of mustard > profits of rapeseed --> Farmer produces mustard instead of rapeseed. This is exactly the consequence of supply and demand. The only noteworthy fact is that we got in this situation because it was not a completely free market but a regulated market due to subsidies for rapeseed, artificially increasing their profit margin.
- bottled_poe 4y ago
  Because demand isn’t the same. Changing the price affects the demand.
viridian 4y ago
This is exactly how a price shift in the supply demand curve works in basic macroeconomics. If you price shift a good upwards and the demand remains static, yield per good increases and then supply should increase as suppliers willing to supply at the new price is greater than supplier willing to supply at the old price.
- bottled_poe 4y ago
  > demand remains static, How can this be an assumption? Of course demand will respond to price.
  - viridian 4y ago
    Demand is a slope, not a point. Price increases left shift demand, prices decreases right shift demand. This is because more people are willing to buy a good at a cheaper price than a more expensive one. In this context demand is the total desire of the market to consume that good at all, represented by a slope that has an inverse relationship with the price axis.

roenxi 4y ago

Which is cool and all, but the side effect of this all is less people would be able to eat mustard. Prices going up is often inevitable but hardly a win. It'd be interesting to have an accounting of what end-of-the-day benefits people got for giving up their mustard.

beowulfey 4y ago
It’s mustard, and there are still other kinds. I’m personally not worried about it. I think we’ll have a lot more of these sacrifices coming up in the next thirty years that will hurt a lot more. Coffee is the one that I’m most worried about.
- jfim 4y ago
  The other kinds of mustard are not really substitutable. It's as if Coca Cola disappeared from store shelves in the US, and someone said it's fine because there's still Fanta and Sprite.
  - JasonFruit 4y ago
    I'm not really sure your analogy helps; in either case, there are people who would agree that it matters, and people who would be baffled that anyone could get wrought up over it.
    - hammock 4y ago
      Replace Coke and Sprite with Trump and Biden. Now we’re talking
    - bobthepanda 4y ago
      What makes the example unhelpful? Coca Cola and associated brands are probably one of, if not the most internationally prolific brands of consumer product in the world. I don’t even drink much soda now and even I remember what they tasted like years ago, or at least the fact that they taste wildly different.
  - deleted 4y ago