3 ms·
> 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
by 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.