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Mega-dairies - cost plus contracts?
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footballjunkie
Posted 10/17/2018 08:06 (#7051404 - in reply to #7051331)
Subject: They do this in the egg industry, you figure up


your costs, submit the bid and compete against others. When you get the contract, it adjusts every couple of months based on feed prices. These fairies have a good thing because they don’t have a lot of competition in this sector. It will cut into their profits when more fairies get big enough to submit their own bids. The other thing is that let’s say that dairy gets cheap on the open market, stores like Walmart will have no problem ripping up that contract and buying milk cheaper on the open market. When the large fairies complain, Walmart will explain that if the suit they will never do business with them again. It happened in the egg industry a year ago.
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