4 ms·

New business formation numbers are utterly meaningless. I can "start a business" by filing an application with the State and paying $100/$200 fee. And don't do

by octobus2021 3y ago

New business formation numbers are utterly meaningless. I can "start a business" by filing an application with the State and paying $100/$200 fee. And don't do anything with it. There is plenty of evidence of consolidation. For most recent one look up analysis on spike of price of eggs. The egg production turned out to be controlled by just a few conglomerates. Which were able to take advantage of (small to almost non-existent) loss of chickens and voila. Price of eggs is non-elastic; that is, you can't easily replace it with other products and it is an important part of Western diet, so people didn't have a choice but to pay up.

sudobash1 3y ago
I have heard one or two other similar explanations for the price increase in eggs. But I have not been able to find any sources for them. Everything I can find suggests that the increase is truly because of loss of hens. Do you have a source for the "small to almost non-existent" loss of chickens?
- vidanay 3y ago
  188.5 million chickens are slaughtered DAILY. https://thehumaneleague.org/article/how-many-chickens-are-in-the-world https://thehumaneleague.org/article/how-many-chickens-are-in... Approx 58 million chickens have been culled in the United States due to bird flu. https://www.cdc.gov/flu/avianflu/avian-flu-summary.htm https://www.cdc.gov/flu/avianflu/avian-flu-summary.htm The first link seems to be specific to meat birds, but I think the concept stands for layers too.
  - GauntletWizard 3y ago
    It's not hard to look up the actual stats for Layers, which have a very different lifecycle. It turns out there's slightly over 300 million layers[1] producing at a time, and the expected lifespan is around 4 years of productive laying[2]. In that light, the loss of 58 million chickens to flu is a very different kind of shock. [1] https://unitedegg.com/facts-stats/#:~:text=U.S.%20Egg%20Production%20and%20Hen%20Population&text=The%20U.S.%20had%20308%20million,produces%20300%20eggs%20per%20year https://unitedegg.com/facts-stats/#:~:text=U.S.%20Egg%20Prod.... [2] https://extension.umn.edu/small-scale-poultry/raising-chickens-eggs#:~:text=Egg%20production-,Hens%20begin%20laying%20at%20around%20six%20months%20of%20age%20and,as%20daylight%20hours%20are%20lost https://extension.umn.edu/small-scale-poultry/raising-chicke....
vasco 3y ago
You present no evidence and talk about eggs... I was genuinely trying to see if someone would point me in the right direction for actual data about consolidation of large companies being more prevalent now than in the past - which outside of blackrock isn't super clear to me. I mean if you go just a few hundred years back I'm 100% sure consolidation was worse because lords and kings owned everything. It remains to be seen if it was better during the 1800s and 1900s but my searching skills aren't coming up with much.
- octobus2021 3y ago
  If detecting industry consolidation was easy, we would be able to easily prevent it and have the free market do its thing. Alas, this is not the case, as definitions of markets, market share, competitors, etc., can be pretty vague. As for the most recent spike in price of eggs a quick search showed https://farmaction.us/wp-content/uploads/2023/01/Farm-Action-Letter-to-FTC-Chair-Lina-Khan.pdf https://farmaction.us/wp-content/uploads/2023/01/Farm-Action... which yes, is prepared by the smaller competitors of the larger conglomerates, but it does present some factual information. Including very small decrease in egg production, high degree of industry consolidation, with one company controlling about 20% of the entire market (and the company saw 600% increase in profits). Here https://www.forbes.com/sites/daniellenierenberg/2023/01/27/cracking-open-the-issue-of-high-egg-prices/?sh=30a0b2b02c09 https://www.forbes.com/sites/daniellenierenberg/2023/01/27/c... you can see more analysis and other examples of industries that are even more consolidated, e.g., 4 companies control 70% of the pork producing market, other 4 companies control about 80% of beef producing market. Look at finance. Look at IT. Consolidation is everywhere. It is natural direction of free markets and, if left unchecked, causes massive disruptions of free market mechanisms.
- danaris 3y ago
  We're not talking about comparing to a few hundred years back. We're talking about comparing to the time since the Industrial Revolution—and especially most of the 20th century. I don't know offhand of any specific and scientific measures of consolidation, but it's painfully clear from observation that over the past 40 years, we have had a massive wave of consolidation in many sectors. Just as one example, I recently saw a chart of consolidation in the (book) publishing industry, where dozens of publishers consolidated into several, and then into the big 4 we have today. Similarly, there are a number of fairly widely-circulated charts of the few companies that own nearly all of the various food and household product brands in the US and in Europe. These are widely-known and well-documented phenomena, and it should be easy to find evidence if you go looking for it at all.

sudobash1 3y ago

I have heard one or two other similar explanations for the price increase in eggs. But I have not been able to find any sources for them. Everything I can find suggests that the increase is truly because of loss of hens. Do you have a source for the "small to almost non-existent" loss of chickens?

vidanay 3y ago
188.5 million chickens are slaughtered DAILY. https://thehumaneleague.org/article/how-many-chickens-are-in-the-world https://thehumaneleague.org/article/how-many-chickens-are-in... Approx 58 million chickens have been culled in the United States due to bird flu. https://www.cdc.gov/flu/avianflu/avian-flu-summary.htm https://www.cdc.gov/flu/avianflu/avian-flu-summary.htm The first link seems to be specific to meat birds, but I think the concept stands for layers too.
- GauntletWizard 3y ago
  It's not hard to look up the actual stats for Layers, which have a very different lifecycle. It turns out there's slightly over 300 million layers[1] producing at a time, and the expected lifespan is around 4 years of productive laying[2]. In that light, the loss of 58 million chickens to flu is a very different kind of shock. [1] https://unitedegg.com/facts-stats/#:~:text=U.S.%20Egg%20Production%20and%20Hen%20Population&text=The%20U.S.%20had%20308%20million,produces%20300%20eggs%20per%20year https://unitedegg.com/facts-stats/#:~:text=U.S.%20Egg%20Prod.... [2] https://extension.umn.edu/small-scale-poultry/raising-chickens-eggs#:~:text=Egg%20production-,Hens%20begin%20laying%20at%20around%20six%20months%20of%20age%20and,as%20daylight%20hours%20are%20lost https://extension.umn.edu/small-scale-poultry/raising-chicke....

vasco 3y ago

You present no evidence and talk about eggs... I was genuinely trying to see if someone would point me in the right direction for actual data about consolidation of large companies being more prevalent now than in the past - which outside of blackrock isn't super clear to me. I mean if you go just a few hundred years back I'm 100% sure consolidation was worse because lords and kings owned everything. It remains to be seen if it was better during the 1800s and 1900s but my searching skills aren't coming up with much.

octobus2021 3y ago
If detecting industry consolidation was easy, we would be able to easily prevent it and have the free market do its thing. Alas, this is not the case, as definitions of markets, market share, competitors, etc., can be pretty vague. As for the most recent spike in price of eggs a quick search showed https://farmaction.us/wp-content/uploads/2023/01/Farm-Action-Letter-to-FTC-Chair-Lina-Khan.pdf https://farmaction.us/wp-content/uploads/2023/01/Farm-Action... which yes, is prepared by the smaller competitors of the larger conglomerates, but it does present some factual information. Including very small decrease in egg production, high degree of industry consolidation, with one company controlling about 20% of the entire market (and the company saw 600% increase in profits). Here https://www.forbes.com/sites/daniellenierenberg/2023/01/27/cracking-open-the-issue-of-high-egg-prices/?sh=30a0b2b02c09 https://www.forbes.com/sites/daniellenierenberg/2023/01/27/c... you can see more analysis and other examples of industries that are even more consolidated, e.g., 4 companies control 70% of the pork producing market, other 4 companies control about 80% of beef producing market. Look at finance. Look at IT. Consolidation is everywhere. It is natural direction of free markets and, if left unchecked, causes massive disruptions of free market mechanisms.
danaris 3y ago
We're not talking about comparing to a few hundred years back. We're talking about comparing to the time since the Industrial Revolution—and especially most of the 20th century. I don't know offhand of any specific and scientific measures of consolidation, but it's painfully clear from observation that over the past 40 years, we have had a massive wave of consolidation in many sectors. Just as one example, I recently saw a chart of consolidation in the (book) publishing industry, where dozens of publishers consolidated into several, and then into the big 4 we have today. Similarly, there are a number of fairly widely-circulated charts of the few companies that own nearly all of the various food and household product brands in the US and in Europe. These are widely-known and well-documented phenomena, and it should be easy to find evidence if you go looking for it at all.