CNN story about food prices

[mgeary]

quote:

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Originally posted by allngood

...He sells his livestock, lowering the supply and further raising the price of meats...

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Uh, I think you got the law of supply and demand precisely reversed, allngood. When corn (grain) prices are high, the incentive to sell the livestock brings downward pressure on the price of meat, because the market becomes flooded with every other farmer doing the same thing, selling livestock. Supply increases, and the price of meats falls...

If the farmers continue to raise their livestock to production weights, paying the extra money for higher priced feed, then the farmer can get a higher price for his livestock. i.e. if the farmer takes the risk to stay in the meat market with higher feed costs, he should be rewarded with higher priced meat. If lots of farmers do the same thing, then the market isn't saturated with meat, it's stable-to-scarce, thus raising the cost of meat to the end-user. Eater. Whatever.[:o)]

Aloha! ;-)