Cp's questions to Adam Smith

[chaffmeister]

<i>Proponents argue that collectively marketing provides an advantage in the markets(which it does).</i>

<b>Wrong. In brackets it should read "which it may".</b>

<i>Oponents say its a giant cluster **** with no direction,control or accountability(which it is).</i>

<b>Wrong again. I'm an opponent and I've been saying for years "the CWB provides no advantage in the markets" (see point made above). I have never said it has no direction (it does, but its aiming in the wrong direction), control (come on now - it's full of it), or accountability. (yes, ok, you've got one out of three.)

<i>Which leads me to the question of do commision rates of orange county realators rise or fall with the number of realators in the markets?</i>

The answer is the rates don't change. the realtors that can't make a living go on to something else. For example, here in Winnipeg (as elsewhere) home sellers have a non-realtor option called ComFree. Much cheaper than using a realtor. But realtor rates haven't changed. Know why?


<i>So chaff if china drops out of the grain buying market the price isnt effected?</i>

If China drops out of the market, they take a huge volume of DEMAND with them. It's not the player, it's the VOLUME that matters.

<i>If the ukraine stops exporting grain the price isnt effected?</i>

If Ukraine stops exporting, that takes SUPPLY out of the equation. It's not the player, it's the VOLUME that matters.

<i>If opec or any other marketing group cut supply the price isnt effected?</i>

Read what you wrote - "cut supply" - this is not - as I stated earlier - a function of FEWER SELLERS (OPEC doesn't cut the number of sellers), which is your argument. (You've just made a point in favour of my argument, BTW.)

<i>If you have ten plumbers in town compared to one prices are the same?</i>

If there is no other means of getting your toilet unplugged - no substitution (say, no other person in town capable of doing it), or no imports available (say, no other plumber from a neighbouring town), then you've just set up a great opportunity for a new plumber to come to town. The only way this or any other monopoly can work is if there is absolutely no way for a competitor to come into the market. If that's your scenario, then, no, prices wouldn't be the same. But kind of a lame, simplistic argument for such a complex discussion, don't you think?


<i>AS a fundamental trader myself i do care about the number of buyers and sellers in a market(where the hell does supply/demand come from?)</i>

Sigh...Why do I get the distinct impression that you just like to argue to show what you "know" and aren't really interested in hearing anything contrary? Can you tell me how much wheat was produced last year? How much was consumed? Now - can you tell me how many sellers were there? (And how do you categorize them - Countries? Companies? Individual farmers?) How many buyers?

<i>Good luck in the markets,you'll need it.</i>

Luck - hmmm, you mean like "chance"; like tossing a coin? Never really got into that approach to my trading.

How 'bout answering my question from before:

The power of one - working for you. Now CP, let me ask you, does one seller command a higher market price or lower?

[IAMTHEMOLE]

More sellers, lower price.

[charliep]

Is the opposite true? More buyers, better price.

Interesting everyone concentrates on the supply side of the equation. The demand side is equally important. The major factor driving oil prices is not OPEC but rather reducing supplies of low priced sources of oil/inadequate refining capacity and the world almost unquenchable thirst for oil regardless of price.

[FarmRanger]

Actually Mole, its more volume produced, lower price (if all other things remain the same).
The exception to this is when you get very few sellers who join forces to change the volume produced to below the regular market supply curve (as in oligopolies or monopolies). Now before anyone goes aha, the CWB is a monopoly, therefore monopoly rules applies, think about what it really means.

The CWB has a monopoly over domestic demand, not the supply where it sells into the world market. It has the power to artificially lower domestic prices in Canada as the monopoly buyer of domestic production (just saying it has the power as a monopoly, not saying it does), but it has to sell that volume of production on the world market as one of many sellers.

[IAMTHEMOLE]

Farmranger, Have you sold live finished cattle before? It is a little different than grain in the bin. More sellers definitely means lower prices in that business. A few buyers(the packers) skulk around and have a knack for finding the producer willing to sell at the lowest price. This sets the bar for everyone else. It is the way it is.

[FarmRanger]

Mole, I can see that happening, when there's a financial incentive for the oligopoly to work. There has to be some method of enforcement for them to work as well, loyalty amongst cattle buyers perhaps?

I really doubt this is happening amongst sellers in international grain markets though?

[IAMTHEMOLE]

Our biggest problem is packer ownership. Could you imagine if the grain companies owned 20% of their needs through production.

[kamichel]

I would imagine they would be broke. If they had my farm and my neighbors then they would not be able to afford someone to manage and work it. I can.

[wd9]

Mole, it is because there are more cattle then customers, simple supply and demand. If there was only one seller of beef, they still wouldn't get a good price because you could just import it. No one is held ransom anymore with international oversupply of a product regardless it seems of the number of buyers/sellers. The only way price goes up is supply less than demand - with strong demand and no substitution.

[wd9]

Mole, it is because there are more cattle then customers, simple supply and demand. If there was only one seller of beef, they still wouldn't get a good price because you could just import it. No one is held ransom anymore with international oversupply of a product - esp beef, regardless it seems of the number of buyers/sellers. The only way price goes up is supply is less than demand - with strong demand and no substitution. Oil is in demand, many buyers/sellers with no substitutions, priced accordingly.