While We’re On The Subject of Supply Chains

[BarryBobPosthole]

https://missouriindependent.com/2022/06/07/the-elephant-in-the-room-is-destroying-family-farms-rural-communities-and-our-democracy-opinion/

But lets continue making bathroom bills and women’s health our #1 priorities.

I’d sure love to hear Muddy’s opinion on this opinion column.

BKB

[Thumper]

Let me start out with an admission that my opinion on this subject is totally, 100%, worthless as I am pretty much clueless on the subject. But I CAN offer my personal observations and experiences. In my lifetime (admittedly as a city-slicker), ALL farmers and ranchers I’ve had personal experience with, I considered wealthy. I spent most of my working life with Cadillac and in “my day”, I knew quite a few farmers/ranchers who always had a new Cadillac in their driveway. (Something besides a pick-up to drive to church, or the wife to shop or meet with her bridge club for lunch). I hunted with a couple of farmers in Ohio who lived pretty darned high on the hog. In California, I dealt with quite a few very (what I considered) wealthy farmers and ranchers. My dad and I built a custom Cadillac pick-up “truck” for a farmer and he had us build a Cadillac station wagon for his wife. I’ll admit, I always looked at farmers and ranchers as “wealthy”, but … and I know this is a BIG but, I have never been in the trenches or had personal experience with the “common man” type farmer. It’s just out of my wheelhouse and I simply don’t have the exposure.

The only two farmers I know personally these days are both in California. They are both multi-millionaires. One is a rice farmer and deals with very high quality rice which is mostly (maybe ALL?) sold to Japanese buyers. The other is an almond farmer.

Again, as one who is admittedly ignorant on the subject, I can only offer my opinion from the outside looking in. I’ve heard the “nightmares” of factory farms and the cries from the common “dirt farmer” about not being able to compete. But isn’t that just an unfortunate sign of the times? What’s the difference when comparing the mom & pop dime store (is that an antiquated term?) to having a Walmart move in next door? Or the mom & pop hardware store having to compete with a Home Depot or Lowes? How many mom & pop diners went under when the big chain restaurants moved into town? Little corner burger joints fighting MacD’s, Burger King, et al? Heck, American Motors couldn’t hold out agains the “Big Three”. We’ve had two large shopping malls in town that have pretty much closed up the past few years. People use Amazon now.

I suppose the list is endless and it’s all a part of “progress”. Some can deal with progress and meet the challenges, for others it’s an impossible task. My grandfather was in the typewriter business (and office supplies) most of his life. He adapted when electric typewriters became the norm, but he just couldn’t keep up once word processors and eventually home computers became the norm. Places like Office Depot and Staples had already put a huge dent in his office supplies business. The store in Orlando had been in business for 51 years when the doors finally closed forever in 1989. I’m sure the list is endless, but I’ll leave it at that.

Is the farming and ranching business any different than the above scenarios? I’m not saying I like it. Just like I don’t enjoy the fact 90% of what I buy these days is made in China. Sure, you can scream “Buy American” all you want, but good luck with that.

[BarryBobPosthole]

I hear you. The 160 acre farm I grew up on made my family far from rich.

My main point here wasn’t necessarily the ‘family farm vs corporate farm’ argument, but what this may mean for supply chain vulnerability. And also what it means for food prices. Again, we have a commodity where inflationary prices are threatening economic issues for familes, all while the main players in this scene are reaping record profits. Sound familiar?
And on edit, reaping record profits while the actual farmer isn’t.
BKB

[Thumper]

I can’t disagree with anything you’ve said. (Did I say that out loud?) ;)

[Chicken Dinner]

I don’t disagree conceptually and have been trying to be more of a “localvore” (to the extent I can afford it) for over a decade. However, paragraphs like this always tweak my spidey sense:

“Here are a few glaring results of corporate agriculture’s stranglehold on farmers, consumers, our food system, economies and democratic process: In 2021, JBS’s (a Brazilian corporation and the world’s biggest meatpacker) net revenue was $71 billion and their U.S. beef division reported a net revenue of $27.18 billion; Tyson had a net profit of $3.05 billion, up $1 billion from 2020; Cargill reported its biggest profit in its 156-year history, netting almost $5 billion; the WH Group, the Chinese corporation that owns Smithfield Foods, reported $27.29 billion in revenue, up 6.7%.”

Whether it’s intentional or just lazy the “author” jumps between net revenue, net profit and revenue to make a point and it can be misleading to someone not reading closely.


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[BarryBobPosthole]

What is the difference between net profit and net revenue? And I looked up WH’s net profits in ‘21. They jumped 7.1%, but they also said they would endeavor to perservere.

BKB

[LJ3]

Revenue is before expenses, capex and opex. Gotta pay the bills man!

[Chicken Dinner]

Net revenue is sales less cost of good sold. Net profit is after all the marketing, admin, etc. revenue is just sales.


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[Penguin]

An interesting subject. Consolidation/monopoly is getting some long overdue discussion. In the US we've the prerogative of deciding what capitalism actually entails and this is definitely a subject we've went back and forth on historically.

I think overall energy access is beginning to plateau. That may have some serious consequences in that huge globe spanning multinationals may not be able to survive in such an environment. I guess we'll see in another few decades.

Will