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More on Fertilizer and US Dollar
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plowboy
Posted 10/28/2007 22:19 (#228308 - in reply to #228118)
Subject: RE: More on Fertilizer and US Dollar



Brazilton KS

If you fill your house up with (pick one:fertilizer, grain, fuel, donkeys, cattle, or whatever) and expect to sell it for cost plus regardless of what the market does while you hold the inventory, you are going to rapidly go broke. Just because you paid $120 for that pen of cattle doesn't mean anyone is going to pay you $100 when they are fat. Unless you want to keep them as pets, you will sell them at the market and hope to make it up on the next time when the price swings the other way. Same applies to a house full of $400 NH3 in a $500 market....if you don't sell it for today's price you will never be able to fill the house back up. If you fill it with $500 NH3 and you refuse to follow the market as it goes back down, what sort of idiot (oops, Ron, there's those idiots again) is going to buy it from you when everyone else is selling for $400? If you fill your service station tanks with gasoline at $2.76 and next week the market drops to $2.50, who on earth is going to buy it from you when it's a quarter higher then they can buy it everywhere else? Nobody, that's who. It will just sit there until the price goes back up, or until the place goes out of business due to lack of sales.

 

Mhagney is exactly correct. There is no such thing as a business that "sets their own price" in a competitive environment. Anyone who claims there is lacks even a rudimentary understanding of econ.



Edited by plowboy 10/28/2007 22:23
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