Artificial High Price?

[Radar]

Could someone explain what an "artificial high price" is. Also are there "artificial low prices". Do either of those come with or in the latter case come without artificial $ or benefits? Is aritficial $ as good as real $?

 

[preston]

Radar,

You are not alone. We wonder don't we? I have concluded that an artificial high applies a few weeks before xmas(shopping prices)...and the 3-5 weeks after xmas...inventory dispersal is the... artificial low. The others are up for question. :???: :lol:

 

[Brad S]

I would suggest the prsent US beef prices are artificially high because there is beef in Canada being locked out of the supply chain for unsustainable reasons. This locked out beef will eventually have to be reconed with either domestically or abroad. So this Canadian beef will make the efficient trip to Seattle and beef in Liberal Ks will go to Japan like the market would dictate or a US embargo will simply send the Canadian beef to Japan and the National beef will go to Seattle.

From the time of the US embargo on Canadian beef, until packing space is constructed to deal with the excess beef, that beef is temporarilly out of the market so the price reflects an untrue picture of the quantity of beef really available. This is what results in our presently artificially high prices.

 

[Radar]

Thanks for the input guys. Pardon me if I'm contrary for a bit. On the first point Preston, have the changes in seasonal demand for beef been similar enough over the years that the prices recieved around the holidays is not an artificial price but a price that has become standard?

Brad S. With the expansion of beef processing facilities in Canada, will the loss in export markets create an artificial low?

 

[Anonymous]

Artificially high prices could be referring to the "lag time" between the purchase price of boxed beef and the final retail beef price.

Retailers are reluctant to change their prices too often to more accurately reflect boxed beef prices so at times they will feature pork and poultry items rather than lowering retail beef prices. That is an example of an "artificially high price" that the market will not sustain.

Yes, the exact opposite can occur as well when retail beef prices are lower than they should be to reflect the supply and demand. Eventually the retail beef prices will have to reflect boxed beef prices but there is "lag time" between the purchase of boxed beef and the sale of retail beef.

As a real time example, ask your local restraunt how often they change prices on their menu?


~SH~

 

[Radar]

Thanks SH, I guess I have been looking at this the wrong way. I was focusing on live cattle prices and not the upstream affects on beef price.