Price Gouging?

[KANSAS]

I have read a few posts in here and must ask the question.. Why do people have such an issue with the folks who have hay charging high prices?

If cattle were scarce in your area and people were willing to pay more than the cow was worth wouldnt you sell it to them?

Have any of you sold or know people who have sold acreage way over actual farm value?

It is the simplest form of supply and demand.. The most basic of economics. When the supply goes down and demand goes up so does the price.

I personally have no problems with this whatsoever, and I have to buy hay.

Lets see here.... hay is up, but cattle are down. Corn is up but cattle are down. What happens to these same farmers when corn goes down. Price of cattle goes up....

I just do not see the issue...

 

[Jogeephus]

I agree with you but I have also read some posts where people had contracted hay and even prepaid for hay in advance only to have the agreements broken because the price of hay has gone up. An agreement is an agreement and should be honored regardless of the market conditions.

 

[KANSAS]

I dont disagree with you if the price was agreed to up front and not honored. That is just bad business, and will come back to haunt them.

 

[Herefordcross]

Higher the Demand=Higher the price. But, the past few years with the droughts scattered around alot of people are gouging other people. for the most part the hay we sell the prices haven't increased very much but, we are also sold out and it's not even Christmas yet.

 

[dun]

There is a fair profit, then there is gouging. On 9-11 a couple of the gas stations went to 5 bucks a gallon for gas. Fair profit or gouging?

dun

 

[backhoeboogie]

There is a fair profit, then there is gouging. On 9-11 a couple of the gas stations went to 5 bucks a gallon for gas. Fair profit or gouging?

dun

Gouging!

I went through this last year. I actually sold a little hay early in the year and then didn't have any for my own stock later in the year. We had to put out hay in July. For '06 I took different measures, less head per acre and had surplus hay to sell. Added irrigation too. My lesson learned for '05 was that I sell no hay until I have enough to make it through the year.

If I don't irrigate, I can sell hay for about $25 less per bale.

 

[Earl Thigpen]

There is a fair profit, then there is gouging. On 9-11 a couple of the gas stations went to 5 bucks a gallon for gas. Fair profit or gouging?

dun

Gouging!

I went through this last year. I actually sold a little hay early in the year and then didn't have any for my own stock later in the year. We had to put out hay in July. For '06 I took different measures, less head per acre and had surplus hay to sell. Added irrigation too. My lesson learned for '05 was that I sell no hay until I have enough to make it through the year.

If I don't irrigate, I can sell hay for about $25 less per bale.

So if $5/gallon is gouging why isn't $100/bale????? Sorry, I don't see the difference.

M. Kansas, I don't know if I started the discussion on price gouging for hay but I have certainly been pretty vocal about it.
Last year I ran out of hay in February. I checked around some of my neighbors and they put me on to a fellow who had hay. I contacted him and met him at his place. He quoted me $65/bale for field grass, $85 for coastal and $95 for Tifton. Folks, this was year old hay! It had been sitting outside and half the bale was rotten and the rest of it had vines growing on it. This man does not irrigate although he probably fertilizes.

I agree with free market pricing but I have said it before and I will say it again, I will not buy hay for $85/bale (and up) and take $.50/pound at market for my cattle. This is lop sided economics. I'll shoot them and let them rot in the pasture before I'll do that. That's my response to free market. So I'll be doing all of you a favor because when my cattle are removed from the market, prices will go up. (yea, right!)

You all have a great day!

 

[dun]

There is a fair profit, then there is gouging. On 9-11 a couple of the gas stations went to 5 bucks a gallon for gas. Fair profit or gouging?

dun

So if $5/gallon is gouging why isn't $100/bale????? Sorry, I don't see the difference.

OK, where does the gouging start and the fair market value end?
Reminds me of the story about the guy that asked a girl if she'ld go to bed with him for a million dollars. She thought about it for a minute and said she wold. Then he asked if she would for a dollar. Her reply was "What kind of a girl do you thnk I am?". He replied, "we've already determined that, now we'rejust dickering about price"

dun

 

[Scotty]

When you are over 200% higher in less than 3 months.

 

[WORANCH]

I have read a few posts in here and must ask the question.. Why do people have such an issue with the folks who have hay charging high prices?

If cattle were scarce in your area and people were willing to pay more than the cow was worth wouldnt you sell it to them?

Have any of you sold or know people who have sold acreage way over actual farm value?

It is the simplest form of supply and demand.. The most basic of economics. When the supply goes down and demand goes up so does the price.

I personally have no problems with this whatsoever, and I have to buy hay.

Lets see here.... hay is up, but cattle are down. Corn is up but cattle are down. What happens to these same farmers when corn goes down. Price of cattle goes up....

I just do not see the issue...

We have suppliers here that sell local for $20-25 a bale . They sold the same hay to buyers in Texas for $75-90 and the buyers hauled it . To me that sounds like gouging.

 

[KANSAS]

If you paid for it it was obviously worth it to you.... If it was too much you would not of purchased it. Get what you can when you can. If the land cannot support the quantity of animals on it even in lean years then sell some livestock.
Like I said I purchased hay this year for 65.00 a bale. Last year it was 35.00/bail. I was happy to get it. Then again my cattle were probably 200.00/head cheaper this year than they were last year. So I lost on the feed price, but evened out on the cattle price. I would say all in all it came out about equal.

 

[redangus]

What is hay selling for in Texas?

 

[Bluestem]

What is hay selling for in Texas?

From the 50.00-60.00 range to as high as 130.00 at the feed stores in N. Texas.

 

[Earl Thigpen]

There is a fair profit, then there is gouging. On 9-11 a couple of the gas stations went to 5 bucks a gallon for gas. Fair profit or gouging?

dun

So if $5/gallon is gouging why isn't $100/bale????? Sorry, I don't see the difference.

OK, where does the gouging start and the fair market value end?
Reminds me of the story about the guy that asked a girl if she'ld go to bed with him for a million dollars. She thought about it for a minute and said she wold. Then he asked if she would for a dollar. Her reply was "What kind of a girl do you thnk I am?". He replied, "we've already determined that, now we'rejust dickering about price"

dun

Very good anology, Dun. Pretty much my opinion on some of the hay growers, too. "We've determined what you are, now we're dickering about the price".

I don't have any problem with folks getting a fair price for their products. If it cost more to produce that product then they should receive adequate compensation. This applies to everything, whether we're talking about hay or cattle or fuel or fertilizer. You ask where I draw the line between adequate compensation and price gouging? Well, I can't give you a number but it has to do with a persons integrity and compassion and a whole bunch of other platitudes that goes into the make up of a person.

Let me ask you a question. If you had hay for sale and it cost you (just for the sake of this question) $25/bale to produce (irrigation, fertilizer, equipment cost, labor, etc) what would you sell it for? $50/bale? $60/bale? How about $100/bale?

I don't want to put you on the spot and I don't expect you to answer. The point I'm trying to make is some folks are trying to take advantage of the other folks that have been hard hit by the drought here in S. Texas and I for one just don't think that's right.

Kansas, I have reduced the size of my herd by about half in preperation for lean times. And I have (I hope) enough hay to last me through the Winter so I'm not hurting as bad as some of my neighbors. If we have a decent Spring I'll make it. If not, well like I said, I will not cave in to someones greed on both ends, feed and market.

So, Kansas, do you shop at Wal Mart? How do you feel about that? I shop at Wal Mart.

Opinions are like elboes, everyone has at least one. (I really cleaned this one up) :lol:

 

[TXBobcat]

What is hay selling for in Texas?

From the 50.00-60.00 range to as high as 130.00 at the feed stores in N. Texas.

I just bought 30 rolls of 6x6 sudan hay for $70.00 roll, delivered. They were very heavy bales. Earlier in the year I paid $60 for coastal rounds.

 

[KANSAS]

You did clean that one up... Thanks....

I dont know, I just think that if someone will pay top dollar for it you should sell it for top dollar. There are hundreds of analogies that could go both ways on this. I am curious how many folks who are raising cattle are also crop farmers. Like my partner said, "Sure my cattle were down 20% this year, but my corn price doubled this year." Now did it cost him anymore to produce his corn this year than last year? No, but he still sold it for double. Should he of simply taken a decent price on his corn and not recieved what the market was willing to pay for it? I dont think so.

Please note: By no means do I want to offend anyone on this, but if your neighbor to the north will give you $100,000.00 for your house, and the neighbor to the south will give you $200,000.00 who are you going to sell it to? And are you going to sell it to him for under what he is willing to pay?

 

[Jeremy14]

You need to take into consideration the reason why someone is willing to pay 5.00 for a gallon of gas (9/11) or 200,000 for a house (their original house burned down) or $80.00 for a bail of hay (reasons could be too many to name).

If a seller is taking advantage of the desperation of the buyer, it is gouging.

Some people were charged with gouging after Katrina when they came from out of state with a truckload of generators that they were selling for triple the retail price of new ones.

If survival is involved, whether it be for your life or livelyhood, it is gouging.

 

[llcupit]

Jeremy 14

If survival is involved, whether it be for your life or livelyhood, it is gouging.

You hit it on the nailhead. And yes some folks are price gouging. Moved to the area in late august and bought hay for $20 and $25 a bale. Give credit to the folks around here for being considerate.

 

[KANSAS]

Alright then what happens when there isnt a drought, and you have all the hay you could ever want thereby reducing the price of hay considerably. Do you pay more to buy hay so the hay producer can make a profit? No, you only pay what the market will bear.

You take the good with the bad........

 

[KANSAS]

Alright then what happens when there isnt a drought, and you have all the hay you could ever want thereby reducing the price of hay considerably. Do you pay more to buy hay so the hay producer can make a profit? No, you only pay what the market will bear.

You take the good with the bad........