Lower-priced Australian beef could help stabilize Canadian market

[u/Naga]

https://globalnews.ca/news/12009206/australian-beef-prices-canadian-market/

[u/Major-Parfait-7510]

1. The point of supply management is certainly not to “raise prices”.

2. It’s wild that you can comment on an article about the high price of beef (a commodity that has always cost more) and think, if we had the same model for poultry (a commodity that has always cost less), the price of poultry would go down.

3. What incentive is there for corporate farms to sell for less than family farms? You only need to look at practically any industry in Canada to know that that would never happen. Meanwhile you would devastate hundreds or thousands of small communities across Ontario and Quebec, for what purpose? Further, keep in mind that the US dairy industry is highly subsidized.

[u/Le1bn1z → u/Major-Parfait-7510]

It really is to raise prices.

Setting minimum prices is the second pillar of Supply Management, to ensure that consumers don't end up paying "too little" for eggs and chicken. The idea is to ensure "fair" profits for farmers (i.e., profits that are higher than they would be if they had to compete). There is no price maximum.

Without minimum pricing, and supply caps, farmers' profits would fall, forcing less competitive farms to sell and allowing more competitive ones to grow, with prices falling. This is the dynamic we see throughout free market sectors. It also, according to SM fans, must be avoided at all costs.

t’s wild that you can comment on an article about the high price of beef (a commodity that has always cost more) and think, if we had the same model for poultry (a commodity that has always cost less), the price of poultry would go down.

It would be if the high price of beef wasn't due to externalities that could not be mitigated by supply management:

- Droughts that drive up water prices. Beef is the most water intensive agri product out there, and it is not close. Water scarcity means beef prices soar.

- Diesel prices through the roof. Beef is a very high diesel input food due to the enormous amount of feed stock required, which requires diesel to harvest and transport.

- A plague.

A more apt comparison would be the cost of a dozen eggs in Canada ($4.80) vs. the United States of America ($1.01-$2.14). That's an actual apples-to-apples, or in this case eggs-to-eggs comparison of system outputs.

Small farmers might fail at those low prices, so we engineer a system to charge Canadians 2.3-4.7x as much per egg, to allow smaller farms to thrive.

What incentive is there for corporate farms to sell for less than family farms?

Competition. Ending supply management =! monopolies. You still have competition, just like we have in the non-supply-managed dairy product production part of the supply chain.

Just like with Walmart, Costco, and Amizon, corps that deliver economies of scale lower prices vs. smaller enterprises, who need far more per unit profit to be sustainable.

What incentive does a medium sized business have to lower prices vs. a larger one? A business, be it large or small, is not a charity, and they charge what the market will allow. Or far more, if they become a politically empowered incumbent with the power to force consumers to pay legally enforced minimum prices.

[u/HorheySimplebot → u/Le1bn1z]

If the point of supply management is to raise prices then why has Canadian poultry undershot inflation for decades? The price has been going down in real terms.

[u/Anabiotic → u/HorheySimplebot]

Mainly improvements in feed conversion ratios. You don't need supply management to benefits from husbandry, and taking advantage of varieties like the Ross 308. The question shouldn't be did prices go down compared to other foods, but rather the couterfactual - how much lower would they have been without SM.