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Not every product is the same. You can't "manufacture" an egg like you do with a car. Entire egg "production" sites need to be shutdown and millions of chicken

Not every product is the same. You can't "manufacture" an egg like you do with a car. Entire egg "production" sites need to be shutdown and millions of chickens killed because of some strain of bird flu for example. And you can't just order 5 million egg laying chickens to substitute the old production with a lead time of a few weeks.

gruez 1y ago
Right, but the OP blames it on "concentration", whereas you're just describing factors that make a commodity volatile. The global crude market isn't anywhere near as concentrated as the US egg market, but it's also quite volatile.
- PedroBatista 1y ago
  The concentration problem is well known in the egg industry but also in the meat industry in general ( Cargill, Tyson Foods.. ) In the past, most farms were independent and the distribution was also very broad. If a couple farms got egg problems ( an example ), the overall market wouldn't even notice other than their county. Now the "farms" are HUGE if a couple ones run into troubles the entire State suffers and the whole national market feels it. Also, many of the "independent" farms in reality run with a single-"customer" contracts and the margins squeezed to the max in a way they even need to borrow huge amounts of money just to stay afloat and don't breach their contracts with huge conglomerates like Tyson. In practical terms the supply side for the quarters is decided by a couple managers who work for these big food companies which have their own "tough" contracts with retailers like Walmart, Target, etc. So if the manager happens to be a dipshit or making a bad move the consequences of that are national. And I'm not even talking about shoving MILLIONS of animals packed in a couple acres. If one coughs..
walkabout 1y ago
Not quite that fast, but not too far off. Certainly a lot faster than building a new factory. Laying chickens start producing in a matter of weeks. Time for breeding to scale is also needed (but very fast), and they’re not producing at max rate for somewhat longer than that, but still, in the scheme of things egg production has got to be among the most-responsive products in the market.

gruez 1y ago

Right, but the OP blames it on "concentration", whereas you're just describing factors that make a commodity volatile. The global crude market isn't anywhere near as concentrated as the US egg market, but it's also quite volatile.

PedroBatista 1y ago
The concentration problem is well known in the egg industry but also in the meat industry in general ( Cargill, Tyson Foods.. ) In the past, most farms were independent and the distribution was also very broad. If a couple farms got egg problems ( an example ), the overall market wouldn't even notice other than their county. Now the "farms" are HUGE if a couple ones run into troubles the entire State suffers and the whole national market feels it. Also, many of the "independent" farms in reality run with a single-"customer" contracts and the margins squeezed to the max in a way they even need to borrow huge amounts of money just to stay afloat and don't breach their contracts with huge conglomerates like Tyson. In practical terms the supply side for the quarters is decided by a couple managers who work for these big food companies which have their own "tough" contracts with retailers like Walmart, Target, etc. So if the manager happens to be a dipshit or making a bad move the consequences of that are national. And I'm not even talking about shoving MILLIONS of animals packed in a couple acres. If one coughs..

walkabout 1y ago

Not quite that fast, but not too far off. Certainly a lot faster than building a new factory. Laying chickens start producing in a matter of weeks. Time for breeding to scale is also needed (but very fast), and they’re not producing at max rate for somewhat longer than that, but still, in the scheme of things egg production has got to be among the most-responsive products in the market.