XPost: or.politics, alt.politics.trump, alt.politics.elections
XPost: alt.politics.immigration, seattle.politics
Baxter wrote:
tRump says Venezuela is safer and better than the USA.
Here's where CommieLa is at,she plans to NATIONALIZE things, and we all
know what a great low cost provider of anything that giverment is, so
get ready for Cuban bread lines if she gets in:
https://x.com/RobertMSterling/status/1824840348008391127
@RobertMSterling
People need to stop overreacting about Kamala’s plan to reduce food inflation, as if it would lead to communism, mass starvation, and the
end of America.
I worked in M&A in the food industry. Here’s a step-by-step summary of
what would actually happen:
1. The government announces that grocery retailers aren’t allowed to
raise prices.
2. Grocery stores, which operate on 1-2% net margins, can’t survive if
their suppliers raise prices. So the government announces that food
producers (Kraft Heinz, ConAgra, Tyson, Hormel, et. al.) also aren’t
allowed to raise prices.
3. Not all grocery stores are created equal. Stores in lower-income
areas make less money than those in higher-income areas, as the former disproportionately sell lower-margin prepackaged foods (“center of the store”) instead of higher-margin fresh products like meat (“perimeter of the store”). Because stores in lower-income areas aren’t able to cover overhead (remember, even if their wholesale costs are fixed, their
labor, utilities, insurance, and other operating expenses aren’t fixed… yet), grocery chains start to shut them down. Food deserts in rural
areas and in low-income urban areas alike become worse.
4. Meanwhile, margins for food producers are also quickly eroding. Their primary costs (ingredients, energy, and labor) aren’t fixed, and their shrinking gross profits leave less cash flow available to cover
overhead, maintain facilities, and reinvest in additional production
capacity.
5. Grocery chains, which have finite shelf space, start to repurpose
their stores (those they didn’t have to shut down, I should say) to sell
more non-price-controlled items—everything from nutrition supplements to kitchenware to apparel—and less price-controlled food products. Your
local Kroger or Safeway starts to look and feel more like a Walmart.
6. Food producers stop making products with lower margins. Grocery chain
start competing with each other to secure inventory. Since they can’t
compete by offering stronger prices (remember, producers aren’t allowed
to raise prices here, and, even if they could, grocery chains no longer
have the gross profit to bear price increases), they compete on things
like payment terms.
7. Small grocery chains start to shut down entirely, or get sold to
larger chains like Kroger. In addition to not being able to cover fixed
costs, a major reason for this is because they can no longer reliably
secure delivery of products, due to producers prioritizing sales to
larger customers, which are able to leverage their stronger balance
sheets to offer superior payment terms.
8. Smaller food producers—which typically sell via distributors, rather
than directly to grocery chains—start to go out of business. Because
these producers have an additional step their value chains, and because
they have lower volumes over which to spread their fixed costs, their
cost structure is inherently disadvantaged compared to major food
producers. When grocery stores aren’t able to raise prices, cutting
product costs becomes all the more important, and deprioritizing
purchases from smaller producers is an easy way to do so.
9. As supply chains break down, lines start to form outside grocery
stores every morning. Cities assign police officers to patrol store
parking lots, and food producers draft contingency plans to assign armed escorts to delivery trucks.
10. The federal government announces a program to issue block grants for
states to purchase and operate shuttered grocery stores. The USDA also
seizes closed-down production facilities.
11. The government announces that prices for all key food costs—corn,
wheat, cattle, energy, etc.—are also now fixed, to stop “profiteers”
from gouging the now-government-operated food industry.
12. Shockingly, the government struggles to operate one of the most
complex industries on the planet. The entire food supply chain starts imploding.
13. Communism, mass starvation, and the end of America quickly ensue.
Hey wait a second...????
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