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Cattle Boards
Grasses, Pastures & Hay
Price gouging vs profit opportunity
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<blockquote data-quote="simme" data-source="post: 1739518" data-attributes="member: 40418"><p>I can understand the price gouging thing if one person corners the market, has plenty of supply and sticks it to the customer at extremely high prices. But a situation where the supply is very limited due to an external condition like drought is different. If you believe price controls are the solution, remember that price controls do not increase the supply. So, the seller has to sell below his price of production, it sells out and no more is available due to the drought, and people still don't have hay. Why should the buyer be protected on price if that forces the seller to lose money? Remember that the seller produced much less product with his fixed costs still the same and his variable costs higher. A free market will cause the price to increase to the point that the additional cost will cover the price of trucking product from farther away. The weather caused the high prices, not the seller. Look at it the other way. If the weather is great and a huge amount of hay is made, a free market will drive the cost down. Should the buyer be required to pay the same amount per bale as in a normal year or should he pay the lower price due to oversupply?</p><p>Feeder calves, grain, hay, trucks, labor - you got to believe in a free market or else let the government set prices for buying and selling. I would rather have the free market.</p></blockquote><p></p>
[QUOTE="simme, post: 1739518, member: 40418"] I can understand the price gouging thing if one person corners the market, has plenty of supply and sticks it to the customer at extremely high prices. But a situation where the supply is very limited due to an external condition like drought is different. If you believe price controls are the solution, remember that price controls do not increase the supply. So, the seller has to sell below his price of production, it sells out and no more is available due to the drought, and people still don't have hay. Why should the buyer be protected on price if that forces the seller to lose money? Remember that the seller produced much less product with his fixed costs still the same and his variable costs higher. A free market will cause the price to increase to the point that the additional cost will cover the price of trucking product from farther away. The weather caused the high prices, not the seller. Look at it the other way. If the weather is great and a huge amount of hay is made, a free market will drive the cost down. Should the buyer be required to pay the same amount per bale as in a normal year or should he pay the lower price due to oversupply? Feeder calves, grain, hay, trucks, labor - you got to believe in a free market or else let the government set prices for buying and selling. I would rather have the free market. [/QUOTE]
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Price gouging vs profit opportunity
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