Just Saying What You Know
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by Jewitt
Many have been looking at the prices of food these days and just stare blatantly at the market with amazement. Some articles in the media have cried “shortage!” and “admin flaw,” and although the later may be a contributor, the former is in no way fact and is quite far from the truth. The market is far from having shortcomings, and may be even near flooding levels. However, the inflation is a definite rise of concern.
At the writing of this article, the mean Q1 price is 1.01 USD (surveying slightly over 1,000 products), Q2 is 3.97 USD (surveying 90 products), Q3 is at 6.25 (lowest being 39 product at 5.55USD and highest being 665 product at 6.99USD). The most astonishing variables are the Q5 food products, with a grand total of about 200 products selling for a mean price of about 14.00USD. The oddest image of our economy is with Q4 food products, with almost 1,000 products averaging around 9.15USD. What does all this say this late at night (12:50am CST)? It means we have plenty of products on the market, especially Q1 and Q4 products. [2]
My primary concern is the inflation rate, brought about the recent production cost changes. “Employers are still paying their employees the salaries they received from when their productivity was much higher and because of this they have to sell their goods for more to make profit,” says the Global Defense Report. Essentially, employers still are giving their employees the pay they deserve for their work. However, due to some administrative modification, the costs of production have been altered so adversely that they are making little, if any, profit. To make those nice returns, employers are raising their prices. [1]
Many media critics are proclaiming that the announced change of the admins making it to where all inventories will be reduced to ten slots will prevent the economy from growth. Quite frankly, this is an unfounded statement. NoneSuch put it best, “i think itd help companies because itd make buying food more consistent.” [4] In like, the lack of bulk buying would present a reality to the owners of businesses of actual market trends and actual demand. By pushing for fewer purchases at a time, the owners can then estimate their market’s worth and set prices accordingly, as well as stabilizing the economy by providing a more stable condition. [3]
Reflecting and reinforcing the previous mention of the inflation prices, businesses are feeling the pinch. There are three food businesses for sale and four grain producing businesses for sale. This accounts for seven food-related companies being unproductive and for sale. An odd coincidence is that all the companies for sale are Q1.
Through a little investigation, it was found that in the market a Q1 company, which will remain to be unnamed, has found that over the past two weeks it is selling fewer and fewer product, despite it keeping within the competition’s price range. A similar comment was made by a Q3 company, citing it may have to lay off a few employees as it has over-employed, but was doing quite well up until recently. All of those I interviewed were unaware of any changes to the system, and figured something was going on with production or the market.
In one interview with a Q5 food company, I did find some irregularity. One company was completely over-employed by 53, yes, fifty-three employees. When asked about their profits, the owner cited “ I dont see any problims wit the company, I am makin as much money as I did a month ago.” Through IRC conversations, it has been found that, although few purchase Q5 food, it has changed very little over the past couple of weeks.
So, the question remains: Is there a food shortage? Of course not. The market has simply too much of Q1 and Q4/5 foods. However, the majority of users purchase Q2 and Q3. When this article was updated, the Q2 market was nonexistent. It just disappeared – obviously there was a huge flux of demand in Q2 food. I, personally, purchase Q2 myself. The increased demand is an obvious indicator of our market. The requirement for more Q2 businesses may be evident, but so is the strain on the economy.
Considering that over a period of two months the price of grain has risen nearly 45%, and food has reflected this.
So, what was the purpose of this article? Getting it out there: There is no shortage. But there seems to be a recession in the employee-demand base of our economy.
The demand for employees are high for the low level businesses which are the backbone of our economy. As workers progress through the skill levels, they leave their lower level companies and work their way up. Thus, the higher quality companies have too many employees and the lower qualities have too few. Evidence of this is that the first four companies on the market’s listing (Q1-Q3), all have less than Max Productivity. Not a single one matched Maximum Productivity and did not until the more costly Q3 businesses.
Possibly this inflation is not just the new formula for production, but also a problem that has been slowly rising: Losing our under-skilled workforce. Without our under-skilled workforce (lvl 1.99 skill and lower) we will begin to feel a major crunch. What should we do? What can we do to solve this? Recruit new players? Push for more immigration of lower skilled laborers? What ever may be the solution, the admins are not the only culprits.
Thanks to all those who participated in the first article of Laissez-faire and I hope to keep this paper going strong and well.
-Chief Editor Jewitt
Sources:
[1] Global Defense Report “The Coming Shortages and How They Will Affect You,” 2008 November 29
[2] US Market, Foodstuffs, at 12:32 am CST, 2008, November 30
[3] Common sense. Period.
[4] NoneSuch, interview, 2008 November, 30
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Comments
The shortage is coming it is not here yet but just wait. The stock of the food companies is steadily declining and Q1 food may run dry by as early as tomorrow.
I have proposed that congress lower the import tax on food to help fill our markets however I do not expect it to do much.
Q1 obviously is feeling the crunch because they cannot find enough workers to produce enough food (which is why I claim that lack of the under-skilled worker as the culprit), and Q2 and Q3 are just transitional positions. The flourishing of the Q4 and Q5 market further proves the point that we need to look into more under-skilled workers.
Regardless if the market dries up or not, we are entering a food crisis somehow, be it a shortage (which may happen, if at all, due to lack of workers compared to consumers) or a hyperinflation.
-Jewitt [C - TN]
Btw the reason there is so much Q4 and 5 food on the market is nobody is going to pay 10 USD to eat.
We should NOT LOWER THE IMPORT TAX.
We have HIGH grain in the USA, the market will reach a point when it will becomes profitable to start a grain or food company at which point people will do so. When we have the grain, why should we let other countries in on our wealth.
I never once advocated a lowering of the import tax, and quite frankly, I personally like the import tax. However, we do need to find a way to make it profitable once more for Q2 food companies to operate.
Importing more food isn't going to make food cheaper unless foreign companies decide to undermine our domestic market. Now how is that going to fix the problem?
I wasn't adressing your Jewitt, I was telling DF that's a bad idea.
What will most likely happen is food will become scarce (Not to a point of no food, but to a point where prices jump significantly over what they should be). These high prices will increase profits for food companies. These profits will go towards more job offers (Because my company is making a killing and the more workers I have, the more I can produce and the more I can make). Now Food companies will have to post competitive wages with RM/Construction companies. people will drift towards the money and many people (like myself), who left manufacturing for Raw materials will shift back to make more money. We will get more highly paid people in Food and they will start producing a lot, they will produce too much for people to consume and companies will start cutting prices to sell their food. This will make prices go down until they reach the level they should be.
I also totally agree with NS.
I also agree with NS,
Undermining our food industry will do nothing but make us reliant on foreign competition; a prime example being the UK Auto Industry IRL, as 95% of their vehicles are foreign and could not rely on their own domestic vehicle base. What would happen if all of those automakers pulled out? Now replace "auto" with "cheeseburger" and you could imagine the hunger that could go through the U.S.
-Jewitt [C - TN]
The only thing that is really going to fix this is time and possibly more companies. Over time people's skill will go up in RM and manufacturing which will make it cheaper to run a company depending on how much a GM spoils their employees. And then if they aren't greedy asshats they can post their food for reasonable prices.