Thursday, August 25, 2011

Government Chicken?

My mother found a gem on CNN Money last Tuesday. In this current era of government bailouts, it feels like everyone, but the middle class and poor have received some form of government bailout. This however, is one of the most bizzare things I’ve heard of.

Apparently, the government is going to make a $40 million dollar purchase of chicken in an effort to stabalize a shaky chicken farming and meat processing markets. Although I have a great deal of respect for our chicken farmers these numbers and reality don’t have any grounding in either economic or rational logic.

The government has taken this step before…making a thirty million dollar purchase last year and spending forty-two million in 2008. The poor economy has caused people to skip buying chicken leaving these vast supplies of surplus that the farmers and processors need to sell at a break-even or even loss point.

The logical though hard to stomach solution to the problem would be to simply produce less chickens to accommodate the sagging market at the expence of fewer producers.

The fact that the government has to continue to buy chicken for three of the last four years speaks to a broader problem within the industry at large. From my estimation, there appears to be a sense of entitlement among the chicken farmers and meat processors to government bailouts, hence the increase in supply that it should be apparent they can’t sell.

 This may be just another example of the do anything for corporate attitude that is driving our country to ruin. Corporations and so called vital industries get generous government bailouts, while the little man on Main Street has uncertain job prospects, flat wages, and surging prices on gas, food, and clothing.


BUT AT LEAST WE HAVE CHICKEN!

Source: http://money.cnn.com/2011/08/16/news/economy/chicken_prices/index.htm

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