Why does Felicity Lawrence have a job?

A job that entails discussing matters economic that is?

The big meat processors have been under constant pressure from supermarkets to keep prices down and to produce special offers for shoppers as food inflation has taken off just as household budgets have shrunk with the recession. This despite the fact that beef prices on the commodity markets have been near historic highs, because the cost of grain needed to feed cattle has also been at record highs, and because the Chinese have been buying up stocks. In a market that functioned properly, prices would adjust to bring supply and demand into balance, but near-monopoly powers have long distorted the UK food market.

Agreed that in a competitive market prices will adjust to keep supply and demand in balance. That\’s what they\’re for in fact. But, err, what is the evidence that prices have not adjusted to bring supply and demand into balance? I\’ve not heard of shortages of meat in the shops*. And I\’ve not heard of vast amounts being thrown away because no one will buy it. I must assume therefore that prices have adjusted to bring supply and demand into balance.

Why doesn\’t Ms. Lawrence assume the same thing?

* Yes, there\’s a product recall going on. Not the same thing at all.

7 thoughts on “Why does Felicity Lawrence have a job?”

  1. Interestingly enough, this was probably discovered by chance. DNA testing is very new technology and was developed to test fish species in finished products. You don’t want to find out that your cod fish fingers are really pollock do you? It was also being tested to see if it could identify rare breed differences – who wants to eat Gloucester Old Spot when Tamworth is available?

    Looks like the Irish FSA were just testing it out to see how well it works and found something they didn’t expect. Watch out for more revelations along this line of analysis.

  2. hang on a minute – supplies want to increase their prices because their costs have risen, whilst buyers are pushing back and trying to keep prices as low a possible? Say it ain’t so!

  3. A big factor in the U.S. is the huge jump in the price of corn, an important feed in the cattle industry. The jump is due to the government’s insistence that it be used to make an inert filler for gasoline.

    I don’t see this changing any time soon, so you can look forward to continued higher food prices.

  4. “Why doesn’t Ms. Lawrence assume the same thing?”

    Because she measure that balance differently than you or I.

    She expects that “balance” in a “free market” means that prices will near instantaneously drop back down to whatever baseline price she’s using. If they don’t that’s evidence of some sort of market manipulation.

    The rest of us understand that there’s no immutable point on a line that is “balance between supply and demand” – Its simply where two lines intersect and if one of those lines changes its slope then the balance point shifts accordingly.

  5. Gamecock // Jan 17, 2013 at 2:37 pm
    “. . .used to make an inert filler for gasoline.”

    We use it to make inert filler for meat – in gas its an active but less efficient ingredient. Oour use of it is in a vain attempt to achieve energy self-sufficiency and sustainability. Except the numbers are in pretty hard that its worse than using straight gas.

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