J. Mark Leonard says:
> Considering the continual expansion of Seaboard and other factory hog farms
> across the U.S., the price of the pig makes perfect sense. It's the prices of
> the supermarket ham and the breakfast muffin that are senseless, since the pig
> is an input for producing both.
> I get your point, your logic is just backwards.
Seems to me that the "prices of the supermarket ham and the breakfast
muffin" make perfect sense. Is this not a textbook example (I note that
you hail from a Department of Agricultural Economics) of the result of
monopoly (do I have to say "oligopoly"?) in a market sector? There is
no incentive to pass along cost reductions to the final consumer, since
real competition does not exist.
I don't think Bill Duesing's logic is backwards at all. I think he is
saying that it doesn't make sense for us, the citizens of this nation,
to subsidize both the petroleum and the pork industry, when our losses
in externalized costs and our losses to monopoly power far exceed any
economic gain passed along to us.
If he isn't saying that, then I will say it.
So Bill's saying that "the current price of the pig just doesn't make
any sense" is a statement that the market price for hogs does not
reflect nearly all the costs. I can find no flaw in that statement or
in that logic.
Apologies to Bill, if I have misunderstood you!