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| Exactly. The companies that sell the finished products on the shelves are in business to make money. They will not pay one penny more than they have to for the raw material that goes into their product. And the cost of the raw material is very little of the total cost. But that is always to blame for the higher cost of the finished product.
Used to grow barley. The malters and AB would always have to arrive at a price to offer for contracts because there is no futures for that commodity. It would go up and down every year in relation to other crops or what they felt they needed. Over 500 cans of beer can be made from one bushel of barley so it really wouldn't affect the price of beer whether the barley was 2 dollars or 10 dollars. But they didn't just go around throwing money at barley growers because they could. And if they did, they'd wind up having too many growers, too much grain. | |
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OK hypthetical on grains prices
