Sunday, September 9, 2012

Uneven inflation

Bacon shortage predicted as hard-up pig farmers quit job

One unfortunate side effect of uneven inflation, is that some endeavour that is otherwise profitable, may find that their input costs are inflated first while their output prices are marketed against as yet un-inflated purchasers. Supply must meet demand so of necessity some of these producers are either going to get out or take a loss. This article points out that the UK pork industry is currently selling herds i.e. getting out of an unprofitable market. On the other hand, some endeavours must benefit by virtue of being the other way around. Mervyn King is painting with very broad strokes so we had better hope in the UK that all the criticisms of central planning are misplaced.

Posted by stillthinking @ 05:10 AM (2147 views)
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13 thoughts on “Uneven inflation

  • There won’t be a shortage of bacon; there’ll just be a price rise. People on tight budgets will just switch to other foods, barely even noticing the change. That’s what happens in free markets.

    Whereas in the housing market we’ve had the shortage and the price rise, but people can’t switch to other housing. As per the board game, the housing market is a monopoly.

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  • Bacon seems much cheaper in Ireland than the UK. I regularly buy bacon joints for 3 euros and slice them myself – thats 700g of bacon for around £2.40.

    Welcome to ripoff Brittan.

    Supavalu three euro deals

    After the high inflation of the last few years, i believe that Euro prices are now cheaper than the UK in many other areas to.

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  • Just to add – Brittan is in for much more pain as the currency depreciates against the Euro.

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  • don’t eat bacon then

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  • don’t eat bacon then

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  • kh,
    Sainsbury’s do 1kg of unsmoked bacon joint for £4; that works out to £2.80 (€3.50) for 700g. That makes yours 15% cheaper, but it’s on special offer. Compared to full price (€5), yours costs 40% more than in the UK.

    The quick way to find out which country is cheapest is by monitoring the flow of shoppers across the border to Northern Ireland.

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  • 1kg for £4 is a great price. I would not like to rear pigs then process the loin for £4/kg, sounds like a loss to me.

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  • What has happened to manufacturing will now occur with farming. Outsourcing and off-shoring. Expect plastic food shipped in from China as USA now suffers.

    Buy direct from your local farmer or loose them.

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  • We have had unsavoury meats shipped into the UK quite literally off the back of a lorry for years. I used to do some work for a very rich Indian chap who brought in chicken from China. cost pennies in the pound per kilo and invariably found it’s way into the contents of ready meals supplied to most supermarkets.

    Buying meat from a butchers can be very expensive but a preference of a lesser cut over supermarkets ‘prime’ for me any day of the week.

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  • mark wadsworth says:

    As Drewster says, won’t this sort itself out?

    Farmers can either grow food for pigs or rear pigs; if food for pigs gets more expensive then at the margin, some farmers will switch from rearing pigs to growing food for pigs. So the price of food for pigs will drop a bit (more supply and less demand) and the price of bacon will go up (less supply) thus increasing the profit margin on rearing pigs (cheaper food for pigs and higher prices for bacon) and so on, until it’s back to being equally profitable either growing food for pigs or rearing pigs.

    I mean, there’s only so much land and only so many farmers and only so much food that they can grow (some mix of vegetables and animals), as long as they are getting the most value out of it, then good luck to them.

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  • if you want nice bacon go to the cheshire smokehouse wilmslow their bacon is far better than any supermarket crap and is sourced in britain rather than the pig abusers in denmark

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  • I still know of dairy farmers producing cheese who discard the whey, yet it used to feed pigs so, some return to wisdom like that would not go amiss.

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