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I love the idea of buying local, but am always frustrated with the price. I intuitively want to think that vertically integrating and cutting out several middle
by s1artibartfast 2y ago
I love the idea of buying local, but am always frustrated with the price. I intuitively want to think that vertically integrating and cutting out several middle men, and selling locally would reduce the price. Especially when I hear so much about distributors gouging farmers. For some reason, this never seems to be the case.
Out of curiosity, I checked out the old salt store and they sell Tri tip for $16-20 per lb. I buy tri-tip on sale for $4/lb, and sometimes $3/lb.
The interesting bit is that I was recently in Switzerland, where it is common for farms to sell meat and dairy direct to the public. I noticed that the there the farm meat and cheese was 25-50% less than the super market.
Taken together, this really leaves me wondering what the difference is between these markets.
- solarpunk 2y agoprocessing. https://www.ers.usda.gov/amber-waves/2024/january/concentration-in-u-s-meatpacking-industry-and-how-it-affects-competition-and-cattle-prices/ https://www.ers.usda.gov/amber-waves/2024/january/concentrat...
- s1artibartfast 2y agoLooks to be an interesting article, but I dont understand which side that comes down on or how it fits into the big picture. A big gap between farm price and wholesale would support the idea that farmers could be competitive by cutting them out. Indeed, it sounds like more are because farmers (or feedlots) are creating new processors. Alternatively, if huge processors are hyper efficient, then what is going on in Switzerland? Why could I buy local meat and milk that was half off the market, and even cheaper than the US from farms?
- solarpunk 2y agoin america the meat processing companies use prison labor paid in pennies an hour. (along with child labor)
- solarpunk 2y agosomeone asked for a source, then immediately deleted their comment so here's one: https://apnews.com/article/prison-to-plate-inmate-labor-investigation-c6f0eb4747963283316e494eadf08c4e https://apnews.com/article/prison-to-plate-inmate-labor-inve...
- tstrimple 2y agoChild labor is absolutely coming back in Republican led states. https://www.epi.org/blog/iowa-governor-signs-one-of-the-most-dangerous-rollbacks-of-child-labor-laws-in-the-country-14-states-have-now-introduced-bills-putting-children-at-risk/ https://www.epi.org/blog/iowa-governor-signs-one-of-the-most... > Last Friday, this concerted attack on child labor safeguards further expanded. Iowa Governor Kim Reynolds signed an expansive bill enacting numerous changes to the state’s child labor laws, including: > allowing employers to hire teens as young as 14 for previously prohibited hazardous jobs in industrial laundries or as young as 15 in light assembly work; > allowing state agencies to waive restrictions on hazardous work for 16–17-year-olds in a long list of dangerous occupations, including demolition, roofing, excavation, and power-driven machine operation; > extending hours to allow teens as young as 14 to work six-hour nightly shifts during the school year; > allowing restaurants to have teens as young as 16 serve alcohol; and > limiting state agencies’ ability to impose penalties for future employer violations.
- wenc 2y agoSwiss farmers are highly subsidized and there are high tariffs for imports. https://en.wikipedia.org/wiki/Economy_of_Switzerland#Agriculture https://en.wikipedia.org/wiki/Economy_of_Switzerland#Agricul... This follows from Swiss neutrality -- you have to protect your domestic food supply to ensure food security. Local milk might be more expensive than imported in Switzerland, but if you compare the prices of 1 gal (3.785L) milk in NYC (USD 5.53/CHF 4.96) vs Zurich (USD 7.24/CHF 6.49), it's more expensive in Zurich. https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+States&city1=New+York%2C+NY&country2=Switzerland&city2=Zurich https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
- s1artibartfast 2y agoWhat about the difference between the Swiss farm and the Swiss market? I was getting fresh milk from a farm for 1chf/L and meat for half Zurich prices.
- bombcar 2y agoPart of the problem is the big guys and the little guys have to do all the same inspections and such which end up being way cheaper in bulk. There are ways around it and if you’re rural enough and consistent you can get down to “close to non-sale prices”. But you can never beat the sale prices as they’re often literally subsidized.
- solarpunk 2y agoinspections/regulations aren't the cost center here. the big guys (a 4 company cartel) get to use literal slave labor to do the butchering, processing, and packing. meanwhile a local farm has to hire a local butcher.
- deleted 2y ago[deleted]
- nebula8804 2y ago>the big guys (a 4 company cartel) get to use literal slave labor to do the butchering, processing, and packing. If this is truly the case then there is a large reckoning coming for everyone who currently benefits from this. That includes consumers. It just seems impossible for the current arrangement to last.
- jfengel 2y agoIt has lasted for several decades, and the core of it dates back over a century. That reckoning may yet come but nobody expects it any time soon.
- Scoundreller 2y agoAI butchers going after consumers keeps me up at night too
- nebula8804 2y agoWhat are you talking about? I'm referring to hidden inflation that is suppressed by this activity.
- rightbyte 2y agoMaybe locally produced items are priced as luxary items? I mean I buy lamb from my farmer neighbors at nice prices, but the local butcher shop is really expansive selling the same meat. Dunno if they give me a friend price though. Locally produced gravel is at least cheaper than big brand gravel ...
- s1artibartfast 2y agoI think you are on to something, but I still dont get why they would be priced at luxury rates in some place like Montana. I would think there would be a long list of potential sellers.
- bsder 2y ago> I would think there would be a long list of potential sellers. But the problem is that the buyers are inconsistent. I remember a story before Covid about a chef in Boston(?) who was trying to buy everything locally. Meat, in particular, was expensive because everybody in the chain was pricing for if they only sold a small amount and had to cover the unsold rest as a loss. Everybody was de-risking the transaction at each transaction point. Once the chef committed to buying a completely consistent amount every single month, he could buy meat for about 80% less since the chef was now the one who was now on the hook for losses. Everybody always seems to write these articles starting from a proposition that "farmers are stupid"--farmers are NOT stupid. Farmers do things they way they do because it makes hard-nosed economic sense. If you want a different result, you're going to need to change the economic system around the farmers. However, you need to understand that "consolidation" is always going to be more profitable than not. This is why farmers started co-ops in the first place.
- repeekad 2y agoNot on sale, but these guys have it (or what I think is the same thing outside California) for $8.50 https://ranchfoodsdirect.grazecart.com/store/product/bottom-round-boneless https://ranchfoodsdirect.grazecart.com/store/product/bottom-... https://youtu.be/OS_3a8vtGYI https://youtu.be/OS_3a8vtGYI
- ohmyiv 2y agoIt's a different cut and generally cheaper (ymmv depending on the store). Tri tip is generally more expensive. It's a sirloin cut forward of the bottom round. Edit: here's a chart https://www.certifiedangusbeef.com/cuts/poster/Beef-Cuts-Print-Friendly.pdf https://www.certifiedangusbeef.com/cuts/poster/Beef-Cuts-Pri...
- fsckboy 2y ago>I intuitively want to think that vertically integrating and cutting out several middle men, and selling locally would reduce the price. Especially when I hear so much about distributors gouging farmers. For some reason, this never seems to be the case. It's not the case because the middlemen exist for a reason, for the reason that it's cheaper to do it that way. Farmers don't have time/resources to slaughter their cows (they don't even have the feedlots that precede that step). For a farmer to "vertically integrate" would mean to first add a feedlot which would mean purchasing some land, and putting feedlot equipment on it, and hiring (and managing) the people do operate it. That investment "demands" some return/profit, because it has the risk of being a complete failure, and the opportunity cost of what else that money could have been invested in, such as NVIDIA stock. There are many more steps for that farmer to vertically integrate the rest of the supply-chain all the way to the retail customer, and all of those investments would demand a return/profit also. But you know what else you would need? A layer of management on top of all of it to keep track of everything. Having independent specialists to provide each function at scale actually saves money. I was once reading a food blog, and the well meaning blogger had travelled to an obscure place and discovered a delicious locally made drink. But he liked the "peasant farmer" producer of the drink, and he didn't want them to get screwed so the blogger was offering up the source of this drink to anybody who would agree to pay double the standard wholesale rate to the farmer and then import it. (this is something like the FairTrade coffee model) But here's the thing: there is a huge time delay between paying the farmer for his product, and receiving the payment from the retail customer who is going drink the drink. If you have the cash to fund this operation (put up your money to buy the product in the third world, and wait to be repaid till the product is sold retail) you are going to have to consider both the time value of money (essentially the opportunity cost, considering you can buy govt bonds at no risk), and also the various risks you face (which the govt bonds don't face): the risk of an accident or theft of the truck that drives the product from the farm to the shipper; the risk of sinking of the ship; the risk etc. of all the next steps, the extra money you'd need to front to the various shippers, warehouses, customs delays, including costs like insurance, retail employee theft, etc. If you factor all those things in, paying the farmer double which means that truckload will cost double is essentially going to mean you will want double the profit at the other end, meaning this product is now twice as expensive compared to its competition. If the product's quality is twice as good, then it can bear that price; but "customers, please pay double so the farmer makes a few pesetas more and the middlemen just make their regular margins" is not a great selling point. So, how does FairTrade coffee do it? Is the fair trade label just a label like "organic" whose meaning may contexualize to a lot less than you think? I'll leave it to you to decide.
- throw0101d 2y ago> I love the idea of buying local, but am always frustrated with the price. It's fascinating how cheap shipping can be, even over huge distances: the lower wages of developing nations is hardly eaten up by transport costs, so even stuff produced from the other side of an ocean or the planet can still be 'price efficient' compared to higher-wage local stuff in developed nations.
- deleted 2y ago[deleted]
- darth_avocado 2y ago> I intuitively want to think that vertically integrating and cutting out several middle men, and selling locally would reduce the price You’re missing the PPP arbitrage. When you can vertically integrate and process the cow in a third world country where median incomes are $1000/year, it would still be cheaper to buy from there and import, than your vertically integrated local farm in a country with $60000/year median incomes. Even though labor costs aren’t everything, PPP affects everything from fuel prices to feed prices.
- Gibbon1 2y agoMy mother said her cousins that ran a high quality dairy in Washington State back in the 1950's would sell all their milk and buy milk from the store. I think that's a testament to economics and how broke they were. Also a while ago estimated it takes less energy to ship banana's from Central America by ship to New York than to ship them from New York to Scranton by truck. So local is kinda relative.
- gedy 2y agoI agree with you, though my thought is the frequency I buy the local "good stuff" is as often as we would have bought ______ at all when I was a child (in a family with tight budget). So maybe the issue is real/local inflation has increased a lot more than products brought in from cheaper/poorer countries.
- jimmygrapes 2y agoUltimately it comes down to reliability. You and every other local might purchase from your local provider as you need it, but there's no reliable pattern or agreement in place.
- noodlesUK 2y agoI think it's easier to buy local in a smaller country too. Living in the UK, I suspect that 80% of my caloric intake comes from things grown within ~500 miles of me (and nearly 100% of the meat I eat), and I don't make great attempts to shop locally (but I do try a bit). When I'm in the US, lots of my food comes from the US and Canada, but that's a much larger geographical market. There's simply not much differentiation between something that comes from Vermont or Oregon. You might not even be able to tell by looking at a label. Whereas when you live in a small country, you can see "Produced in UK" or another nearby country fairly trivially.
- ephimetheus 2y agoEspecially meat is particularly expensive in Switzerland, however, compare to most of Europe. The marketing somehow managed to cement this a meaning higher quality, and the population largely accepts the higher price.