Text 17315, 125 rader
Skriven 2008-06-06 09:57:16 av Robert Bashe (2:2448/44)
  Kommentar till text 17289 av Michiel van der Vlist (2:280/5555)
Ärende: Humo(u)r
================
Michiel van der Vlist wrote to Robert Bashe on Friday June 06 2008 at 01:08:

MV>>> A cheaper Doller will make the price of (chicken) food go up.

MV> I should have written: will make the price of chicken feed
MV> _in_Dollars_ go up.

Here and further on you're assuming a tight market for chicken feed, where
relatively minor changes in demand can cause major swings in the price. But
don't kid yourself: the USA middle west can still produce more grain and other
agricultural products than the US can consume. Don't you remember how the
American farmers were always so interested in exporting their surpluses to the
USSR?

MV> No, but the US producers of chicken feed will _export_ to the Euro
MV> area, thereby reducing supply on the US market and driving the price
MV> up (in Dollars).

This is what I mean, and I'm nearly 100% convinced your assumption is
incorrect.

RB>> Maybe, but I can remember several times in the last decade when the
RB>> chicken market in Hong Kong collapsed due to disease. People tend to
RB>> prefer reliable suppliers, and ones who stay out of the news reports.

MV> Diseases happen everywhere. Even here in The Netherlands. H5N1 has
MV> done a lot of damage to the poultry industry all over the world, the
MV> US chickens will not be immune.

Since when has something like has happened twice in Hong Kong occurred
elsewhere? I'm not talking about local, controllable outbreaks, the ones you're
thinking of, but massive problems that affect an entire country. The only
parallel in the EU was the BSE outbreak in England. And incidently, people
don't generally live with chickens in the same house outside countries like
China and Vietnam - where the major outbreaks of poultry disease have occurred.

MV>>> Maybe you have not noticed it yet but many economies are starting to
MV>>> shift from Dollars to Euros, and for good reasons....

RB>> To sell, yes. Not to produce.

MV> You can not only sell in Euros and buy in Dollars. That way you will
MV> run out of Dollars end be left with a surplus of Euros. You need
MV> someone who will do it in reverse to balance.

Run out of Dollars? Now you're being funny again. Currency flows are
macroeconomics, not something that has to be organized in a single company or
even a single industry.

MV> What I know is so far no one from outside the Eurozone has been
MV> successful in penetrating the local market.

Maybe they haven't tried. Wait and see. Or the laws and conditions in the EU
are, or have been, too restrictive. If I remember correctly, the EU only
recently decided to allow American chicken that has been disinfected into the
EU.

MV> If US chicken feed is so cheap in Dollars, what is stopping the
MV> European chicken farmers from buying cheap American chicken feed,
MV> thereby spending Dollars to raise their chickens and get Euros when
MV> they sell?

The freight on chicken feed is higher than that on the equivalent weight of
chicken (if I remember correctly, you need around 10 times the weight of feed
to get one unit of meat), so it's a good deal cheaper to ship the meat than the
feed. And, as above, the EU laws and conditions may be too restrictive.
Remember genetically engineered grain? Anyway, neither you nor I have any
definite knowledge on this, so both of us are speculating.

RB>> I agree, but why should anything like that happen? The products will
RB>> be so attractive just on the basis of the lower production costs that
RB>> they can easily compete without any government aid.

MV> If it is that simple, why are we not flooded with American products
MV> already? Why is there no American beef on the shelves here?. Or pork?

Laws and conditions. Argentinian beef is cheaper. And Europeans like leaner
pork than in the States, where a lot is made into bacon.

MV> The only US products I see are grapefruits and wine. They don't
MV> compete well with what comes from South Africa...

Price isn't everything. Like I say, laws and conditions also play a major role.
And of course differences in taste. I already mentioned the case of California
pistachios, which I think are not very good, but are the only ones you can now
get in Germany.

RB>> Just look at Germany and ask yourself why it's cheaper to import coal
RB>> from the States than to use German coal.

MV> Because the German coal mines have almost been depleted?

No, because it's cheaper to buy strip-mined coal from the States even when you
include the shipping expense than to deep mine it in Germany. Or for that
matter to use strip-mined lignite from Germany as a substitute.

RB>> And that's a fact: most of the coal used to generate electricity in
RB>> Germany comes from mines in the northwest USA. The cheaper Dollar (in
RB>> terms of Euro) only increases the commercial advantage.

MV> Eh... didn't you say that what goes up must come down? <beg>

Are you backtracking, Michiel <beg>? Incidently, I expect to see a further drop
in the Dollar vs. the Euro in the immediate future, as the ECB plans to raise
interest rates to reduce the upswing in inflation. That, together with the
reduction in interest rates in the States to try to counteract the mortgage
financial crisis, can only depress the Dollar in the short term. However, that
doesn't mean I don't still consider the Euro overvalued at the present rate of
exchange, only that such events can influence exchange rates in the short and
occasionally medium term.

MV> Regarding the US "chlorine" chickens flooding the market here.. I will
MV> believe it when I see it.

You mean when you eat it ;-)

We'll see. And by the way, I never claimed they would "flood" the market, only
that they would be attractive in price and would sell - assuming no laws are
enacted to specially mark (discriminate against) them, which in Germany is a
definite possibility, as environmental hysteria is a widespread disease here.

Cheers, Bob

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