Milk Prices Could Double Next Month

[71buickfreak]

It all depends on how far you take it. There is a fine line and it has to be walked.

 

[LightningCrash]

It has to be walked? Why can't it be steered clear of?

 

[mons meg]

It has to be walked? Why can't it be steered clear of?

Preach it, brother LC!

 

[Werewolf]

Braums is the master of vertical integration. They have 13,000+ acres along the river that they grow silage to feed over 10,000 head of cattle. Thats just in Tuttle. IDK how many they milk in Shattuck but I'd guess 2-3000. Might be more.

Even with control of the source of their feed, they spend an ungodly amount of money on irrigation and fertilizer. Not to mention the amount of dozer work they do. They are always clearing out trees to make more farmland or creating irrigation ponds.

I and many others have said for a long time that if Braums had to make it farming, he would have been busted out long ago. In fact, I doubt they even want the farming operation to make money. The money coming in from ice cream sales must be pretty good.

They have control of their product from the feed the cow eats, through the pasteurization process, to the packaging, to the point of sale.

Way way back in time when I was an undergrad at OU Braums was used as a case study when teaching students about basic business. Back then Vertical Integration was the goal for world class manufacturers and retail businesses with the right kind of product to make it work. Vertical Integration can't work for every type of business but for those who sell the right kind of products it surely can and is the ideal model to maximize profit (which for those that don't get capitalism is the real invisible hand or put simply the underlying foundation of the system).

Braum's definitely has its business act together and IMO is a business to be admired.

 

[71buickfreak]

It has to be walked because if you leave all businesses alone, without regulation, you get monopolies where everything costs a fortune, but wages don't increase, kind of like what happened to the economy in the mid 2000s, when gas prices soared. It tanked the economy, it still is wrecking havoc. Every industry is at risk, from oil to eyedrops. Some self-correct like mechanic work, if you charge too much, people will find other people to do the same job for less. Producers, especially commodities, things that are required for life and get used up specificially, require both large and small producers to provide the necessary quantities to support us. If you let the smaller shop go under, then there simply won't be enough to go around. there is a balance, the world is not black and white, it never has been, it never will be. You gotta walk the line, which is fuzzy at best. Super thin and fuzzy.

 

[LightningCrash]

Wait, the oil crisis of the 2000s is a monopoly?

When smaller shops go under somebody else takes their place. Happens all the time in the oil world, or we just deal with less for a while.

 

[mons meg]

LC, I just filled up at my Standard Oil station...uh...Phillips....er.....wait.