Summary
Canada has avoided the severe egg shortages and soaring prices seen in the U.S. due to differences in farming practices and regulations.
While avian flu has devastated large American egg farms, Canada’s smaller farms and tightly sealed barns have limited the impact.
The U.S.’s industrialized egg industry, driven by cost efficiency, is vulnerable to supply shocks when outbreaks occur.
Canada’s supply management system ensures stable production and restricts imports, keeping farms smaller. Meanwhile, U.S. consumers face continued egg price surcharges and supply pressures.
Not necessarily. The long-term / short-term focus is a red herring. Without intervention, the system drives people to focus on ever shorter term in order to compete. Because firms can fail due to competition in the short run, before any negative effects of the short term thinking of the competitor have materialized. It’s even possible to consolidate the market before “the chickens come home to roost.” And then you have the mitigating factors - once you consolidate a critical market, your problems are the society’s problem and the society will pay to resolve the issues from your short-term thinking. And then you have the ability to get out of the market before the big problems start showing up. Put all of this together and you can see that the completion for profit in a competitive market can easily drive shorter and shorter term planning without the winning players facing consequences. If it’s not profitable to focus on long term planning and the system uses profit to determine success from failure… I think we can’t expect individuals or even firms to focus on the long term.
In theory that could all sound very true.
But the investments need to pay themselves back, and setting up large agricultural production takes time to earn back the investment. So there are limits as to how short term you can invest.
This is probably the lowest denominator disease, where investments become more and more irresponsible, because of lack of regulation that set a lower bar for how irresponsible you can be.
Kind of the same as with the financial crisis almost 20 years ago, that caused an economic slump for 10 years. I wouldn’t be surprised if the egg market similarly will take a decade to return to normal.
Right but if investment relies on regulation to be responsible, and removing such regulation leads to potentially higher profits… And if you’re able to collect profits on future expected returns today via asset markets… Then wouldn’t most try to get rid of such regulation? Most of those people 20 years ago made a killing following deregulation they lobbied for earlier.
This is true, but it’s 99% a misunderstood perception by the buyers, they generally fail to realize that they are buying in at way higher risk.
Deregulation does not generally promote profits, even when it allows to cut cost.