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That's also how a pure commodity market works. The price is the marginal cost. That's how commodity producers like farmers can be profitable. The margina

That's also how a pure commodity market works. The price is the marginal cost. That's how commodity producers like farmers can be profitable. The marginal producer makes no profit, but every producer who can get their costs below the marginal producer makes a profit. If farmers didn't make any money, they'd stop farming and we'd have no food.

QuantumGood 10mo ago
"Make any money" is not clear enough. Providers of input and purchasers of output have each become monopolies and have squeezed the profit out of smaller providers. They borrow to survive, government pays those that loaned the money, then the cycle continues. Farmer suicide has become a very popular way out of the cycle, which is one indicator that the money isn't really there any more.
- bryanlarsen 10mo ago
  Saskatchewan farmers have done very well since ~2000 or so. The 80's and 90's were very rough. Yes, costs have skyrocketed -- combine harvesters start at about a million now. But wheat prices and yields have been high enough to more than compensate. But Saskatchewan farmers are a great example of a low cost producer. A Saskatchewan farm usually runs about 10,000 acres per operator. UK farms with a couple hundred acres can't compete.
Havoc 10mo ago
> The marginal producer makes no profit This isn’t a farmers market where individual actors can swiftly respond to supply and demand. This stuff has decades of lead time, is full of regulations and thus long term imbalances. Nor is this a case of marginal anything. Gas is almost TRIPLE the price [0]. A normal functional efficient market like you have in mind would adjust to that sort of enormous profitability differential, the uk market has not. https://www.nationalgrid.com/the-great-grid-upgrade/fact-or-fiction https://www.nationalgrid.com/the-great-grid-upgrade/fact-or-...

QuantumGood 10mo ago

"Make any money" is not clear enough. Providers of input and purchasers of output have each become monopolies and have squeezed the profit out of smaller providers. They borrow to survive, government pays those that loaned the money, then the cycle continues. Farmer suicide has become a very popular way out of the cycle, which is one indicator that the money isn't really there any more.

bryanlarsen 10mo ago
Saskatchewan farmers have done very well since ~2000 or so. The 80's and 90's were very rough. Yes, costs have skyrocketed -- combine harvesters start at about a million now. But wheat prices and yields have been high enough to more than compensate. But Saskatchewan farmers are a great example of a low cost producer. A Saskatchewan farm usually runs about 10,000 acres per operator. UK farms with a couple hundred acres can't compete.

Havoc 10mo ago

> The marginal producer makes no profit This isn’t a farmers market where individual actors can swiftly respond to supply and demand. This stuff has decades of lead time, is full of regulations and thus long term imbalances. Nor is this a case of marginal anything. Gas is almost TRIPLE the price [0]. A normal functional efficient market like you have in mind would adjust to that sort of enormous profitability differential, the uk market has not. https://www.nationalgrid.com/the-great-grid-upgrade/fact-or-fiction https://www.nationalgrid.com/the-great-grid-upgrade/fact-or-...