Economy: Graingate

Day 890, 09:08 • Published in Canada Canada • by Alias Vision

Diamonds, iron, oil and wood all have a certain degree of scarcity in the New World or are required for labour intensive projects (like defense systems in the case of wood). Unfortunately that is not the reality of grain which is the most abundant raw resource worldwide. It is the easiest to generate but as we will see, the toughest to maintain.



There is no good news for the grain industry in Canada. Because we are a raw resource rich nation, grain suppliers must compete with diamond producers and oil exploiters for the best land workers we have. That competition is uneven at best because of the earning power of the other types of raw material vs. grain.

This snapshot was taken on the morning of Day 889. All numbers are based on job offers in the Canadian market for salaries and prices on both the domestic and foreign exchanges for grain. It assumes the worker maintains a wellness of 90 or higher and that the company is operating at full capacity. In other words these are ideal scenarios for reasonable owner expectations.

The best value for your productivity dollar in the land industries is a skill 3 worker ($0.64/production point). However, after careful analysis, it was concluded that you could be even more productive with some juggling of skill levels and q-levels.

The price of grain varies from $0.35/unit at Q1 levels to $0.23/unit at Q3. The lower price per unit is used as this is the level at which an owner is most likely to sell.

Note: by the time of writing this piece, the price of grain had dropped to $0.22/unit in Canada.

A Q1 grain owner is best to hire skill 1 workers. It will come as no surprise that the very low world price of grain makes this a very difficult business. Q1 owners can expect losses of up to $40/day.

Q2 grain owners will benefit from hiring the slightly more skilled 2 worker. Even so, the losses would be important and accumulate to around $24/day.

All other Q level owners are best to hire skill 3 workers to maximize income and expenses. Even so the see of red ink continue until the highest quality grain which would still only generate a tiny profit of $5/day.

Q-level, gold revenue/day
1, -1.29
2, -0.79
3, -0.39
4, -0.01
5, 0.18

If you wanted to compete with the black market, you would have to lower your prices even more to around $0.18/unit (Note: $0.17/unit by the time of this writing). And now your financial situation would look like this:

Q-level, gold revenue/day
1, -1.35
2, -1.03
3, -0.86
4, -0.56
5, -0.41

[img]http://farm1.static.flickr.com/161/383917807_115a7cb169.jpg?v=0[/img]

Now obviously there is some money to be made otherwise there would not be a single grain company in Canada but the going would be extremely difficult for any new prospective owner that did not have substantial financial backing.

The fault is not with the grain industry itself or with the size of the Canadian population. It is a byproduct of having to compete directly with other industries whose revenue are 19% (diamonds) and 20% (wood) higher.

Until and unless V2 bring skill specialization in the raw material sector, this will continue to be the case. Canada will never be competitive in the grain sector vs. countries that possess only one high quality resource region.

Previous economy (industry) articles:
Gifts
Diamonds
Weapons
Houses
*economic numbers in the New World change daily, the above statements may be slightly out of date. Thank you for your understanding.