Monday, November 30, 2009

Why Fruit Farmers Have It Easier Than Animal Farmers

Harvard economics professor Greg Mankiw posts on apple producers who find a bumper harvest means prices go low, so low it's not economic to harvest fruit for juice.  He sees it as a textbook case of producers cutting back production.

I guess, but I'd point out, as I tried in the title, that animal farmers are in a different situation.  Yes, you can cut back production very marginally--you dry up cows a little earlier, feed your animals a little less.  But, given my parents stories of dairymen's strikes in the 1930 where producers had to dump milk, I'm sensitive to the it. An apple grower, in the fall, is facing the picking expense, which I'd guess is a significant portion of the total costs of the crop.  If she can't sell the produce to the juice people for more than the cost of picking, it's a no brain decision.  The situation facing a pork producer or a dairyman is more complicated--each day your animals live is another day of feed costs (plus labor, but here feed is probably the big item). So it's not a black and white calculation, it's a guess of what the future holds--lower feed prices, higher pork prices, higher milk prices, whatever.

NOTE:  I'll be traveling tomorrow through Friday so blogging is likely to be light.

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