Death comes to us all. Life's but a walking shadow | If you want to see just how well a completely unregulated free market system works you only have to look at the current situation in the beef industry. After years of packer consolidation which gave the packers too much economic power vis-a-vis the producer it resulted in a 100,000 or more producers exiting the business and the cow herd declining some 10 million head (25%) before allowing the price signal to operate.
What was once the packers advantage, namely if the price of fat cattle rose a little too much they just killed a few more cows has become the out of control mechanism to force further declines in the cow herd. As the result even as the price of calves hits $2.20 the cow herd continues to decline because packers continue to bid up the price of cows for beef.
What would be the response today if every time the price of grain doubled the acreage fell another 5-10%. |
Ethanols long term consequences ?
