a randy oliver snip in response to a prior post

> >Queen producers charge what they charge because if they went too much
> higher the competition would take their business away from them.


I pointed out at a recent meeting, that with any other ag commodity if
demand exceeds supply, the price goes up.
The Calif queen producers are typically completely sold out each spring in
recent years, yet haven't raised prices accordingly.

my comments...
well the first comment suggest a narrow view of marketing strategy.  basically some folks are price setters and some are price takers.  sadly many many folks in ag are price takers and this defect in their marketing strategy is known by the other side even before price negotiation begins.  price takers often do not know their market or their cost and this places them at a disadvantage both in terms of setting a price and in terms of long term survival.  as a GENERAL RULE folks that are price setters also tend to be more innovate since they can afford the price of innovation.

As the the latter comment (Randy's)... this is only one of two known cause of price increase as is often explained by economist.  What Randy describes above is commonly referenced as 'demand pull' price increase.  The other variation of this is 'cost push' which describes when cost accumulates producers must eventually raise price.  Quite often in agriculture where the goods sold are referred to as 'inferior goods' there is a counter intuitive relationship between profits and total supply.

finally... free markets is a concept as as far as I know there are no known examples of this concept existing in the real world.  like Ann Ryan's literature this is 'utopian fantasy' and the implementation of these sorts of IDEAS would never work in the real world.  The real concern (from an economist standpoint) is ENTRY and EXIT from a given industry.  As long as the government rules and regulation do not severely limit entry then there is really nothing negative about the existence of governmental regulation or rules.  In some ways rules and regulation does insure survival for folks already in the industry by insuring a certain minimum both in terms of quality of output and a minimum price < no matter if you are in the honey selling market or the queen selling market all you need is one young idiot entering the market, slicing prices below the price of production and in the next season there will be none of the above for sale since ALL have gone broke.  

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