It appears Blake got there first.
Of course the price of beef will affect the amount of beef eaten. And the amount of beef eaten will affect the price of beef. But what we’re talking about now is the demand for beef. And I’ve said all along that the demand for beef will affect the market. So we’re in agreement.
But this reinforces my point - the demand for leather had nothing to do with this. As long as people are buying beef, the amount of cattle necessary to produce that amount of beef will be slaughtered. No additional cattle ever need to be slaughtered to produce leather, so leather production has no effect on the amount of cattle slaughtered.
Basically, the amount of cattle slaughtered for beef will fluctuate due to the demand for beef. But the amount of cattle slaughtered for leather will always be less than the amount of cattle slaughtered for beef, so amount of cattle slaughtered for leather is completely subsumed within the amount of cattle slaughtered for beef. Do you follow me now?
Your mistake was in step #6. In the model I described (which was based on real life) there’s always enough leather. As I’ve said, the amount of cattle necessary to supply all the hides needed by the leather industry is far below the amount of cattle needed to supply meat to the beef industry.
Consider these figures:
Demand for beef: 1,000,000 cow’s worth
Demand for leather: 25,000 cow’s worth
Amount of cows slaughtered: 1,000,000 cows
Demand for beef: 1,500,000 cow’s worth
Demand for leather: 25,000 cow’s worth
Amount of cows slaughtered: 1,500,000 cows
Demand for beef: 750,000 cow’s worth
Demand for leather: 25,000 cow’s worth
Amount of cows slaughtered: 750,000 cows
Demand for beef: 1,000,000 cow’s worth
Demand for leather: 100,000 cow’s worth
Amount of cows slaughtered: 1,000,000 cows
Demand for beef: 1,000,000 cow’s worth
Demand for leather: 5,000 cow’s worth
Amount of cows slaughtered: 1,000,000 cows
Demand for beef: 1,500,000 cow’s worth
Demand for leather: 100,000 cow’s worth
Amount of cows slaughtered: 1,500,000 cows
Demand for beef: 1,500,000 cow’s worth
Demand for leather: 5,000 cow’s worth
Amount of cows slaughtered: 1,500,000 cows
Demand for beef: 750,000 cow’s worth
Demand for leather: 100,000 cow’s worth
Amount of cows slaughtered: 750,000 cows
Demand for beef: 750,000 cow’s worth
Demand for leather: 5,000 cow’s worth
Amount of cows slaughtered: 750,000 cows
Here’s an analogy. A carpenter makes bookshelves. And while making the bookshelves he also produces some sawdust. Now if he’s lucky he might be able to occasionally sell a bag of sawdust for a dollar to someone who wants some but usually he throws any sawdust in the garbage.
So the carpenter builds a bookshelf whenever there is a customer for a bookshelf. But he’s never going to build a bookshelf because there’s someone who wants a bag of sawdust.
Once again you have totally overlooked that supply and demand runs both ways.
What you say above may well be true but you are adamantly refusing to accept that the obverse is also true: As long as abbatoirs are selling leather at a profit they will slaughter more cattle than they would if leather were not being sold. Additional meat is being produced at any given price because it is made profitable by the subsidisiation provided by leather sales. So leather production has a potentially massive effect on the amount of cattle slaughtered
Once again you are labouring under this strange notion that somewhere an abbatoir exists where cattle are being slaughtered for beef.
I’ll say it again: Cattle are not slaughtered for beef. Cattle are slaughtered for profit.
The amount of cattle slaughtered for profit will fluctuate due to the demand for profitable beef-adjacent products. Not just beef but all profitable cattle products from gelatine to dung to leather.
I think that if you stopped working under an assumption that cattle are slaughtered for beef you would comprehend this a lot more easily. Cattle are slaughtered in part for beef, but in part for leather and in part for fertiliser and in part for gelatine and so forth. Once you accept that I think you wil see why the amount of cattle slaughtered will fluctuate due to the demand for all those things.
Oh I follow you, it’s just that your argument is apparently logically flawed and contradicts basic economic theory and is based entirely on a misunderstanding of the working of a free market.
Let me say it again, the amount of cattle slaughtered for leather will never be less than the amount of cattle slaughtered for beef because no cattle are ever slaughtered for beef and no cattle are ever slaughtered for leather. Cattle are slaughtered entirely and toatlly for profit. Nothing else, just profit.
If you believe that cattle are being slaughtered for leather and beef then produce a reference showing an abbatoir that has actually done so, rather than slaughtering their cattle for profit.
And if you do finally accept that cattle are slaughtered for profit and not for beef then why would a decrease in demand for profitable slaughter products not result in a decrease in numbers slaughtered?
Seriously Little Nemo, we are supposed to be here to fight ignorance. I asked you 3 simple and clear questions abovein the interets of doing so. Why won’t you answer them? I am willing to concede that I may be the one missing the blindingly obvious here, but we won;t know unles you actually repsond to my posts. Answer my questions, tell me specifically what I have said that you disagree with or don’t understand. Acknowledge when I have adressed a point of yours with an apparent flaw.
Simply rephrasing the same position that I have already dissected in detail and pointed out several flaws in (including repeating the claim that cattle are slaughtered for beef) withoutin any way adressing my posts will get neithe rof us anywhere. If you think my cristicisms are unfounded thenby all means point out where. But don’t simply ignore them.
And please, answer those questions. I really think this is the simplest way for us to work out who is missing what.
And do you really believe that there exists a carpenter who is going to build a bookshelf because there’s someone who wants a bookshelf? Can you get me his name and phone number please? Because all the carpenters I know will only build me a bookshelf because I pay them money. It doesn’t matter how much I want a bookshelf. They won’t build a bookshelf because someone wants a bookshelf any more than they will build a bookshelf because someone wants a bag of sawdust. Carpenters will only build a bookshelf if they can make a profit.
Now examine your analogy in that light.
A carpenter makes bookshelves in order to make a profit, not for the love of making bookshelves.
And while making the bookshelves he also produces some sawdust. Now if he’s lucky he might be able to occasionally sell a bag of sawdust for a dollar to someone who wants some but usually he throws any sawdust in the garbage.
Over the entire year the amount of sawdust he sells averages out to $2.00 worth for each bookshelf. And he can’t sell bookshelves for more than $100.00 each. And the amount of wood he uses costs $60. And his tools, electricity, workshop rent, insurance etc cost $35. And he has to pay $3.00 stamp duty on each bookshelf sold.
So tell me Little Nemo, using this example, what percentage of our carpenter’s profits are represented by sawdust sales? How much profit will he make if the demand for sawdust vanishes altogether? How many bookshelves do you suppose he will make if the demand for sawdust vanishes altogether?
I’m serious, please answer these simple questions so we can figure out exactly where you disagree with me. I know where I disagree with you. It is your assumption that a carpenter builds bookshelves because people want the, rather then because he can make a profit building them. Now maybe if you answer these simple questions we can work out what part of what I’m saying you actually disagree with.
This is why they call it the dismal science.
I feel like we’re beating a dead cow here but I’ll run through this one more time. A carpenter makes money selling bookshelves. And he sometimes makes money selling sawdust. But his decision on whether or not to spend his time and materials building a bookshelf will be based on whether or not he thinks he can sell the bookshelf not the sawdust. The sale of the sawdust is never enough to justify the effort of building the bookshelf. The sale of the bookshelf is enough to justify the building of a bookshelf even if there is no potential for sale of sawdust. So the potential profit of selling sawdust, even if it is a guaranteed 100% paid in advance sale, is not enough to make the carpenter build a bookshelf. So the profit on sawdust has no effect on the carpenter’s decision to build a bookshelf.
Blake, I want you to go back and read InvisibleWombat’s post. He has actual real world experience on the issue of slaughtering cattle. And according to him, “around here, eliminating some demand for leather would have precisely zero effect on the number of cattle slaughtered.” Are you one of those economists who feels that when the facts disprove your theory that the facts must be in error?
I notice that yet again you point-blank refuse to anwer three very simple questions so we can clear this up. I am rapidly coming to the conclusion that you are being willfully ignorant.
Cite.
Why would his decision not be based on how much profit he can make form the entire enterprise?
And if you werne’t ducking my questions you would already have seen that the sale of bookshelves is often not enough to justify the effort of building a bookshelf. Only the combined profit of the entire enterpsie makes it profitable to build bookshleves.
No it ins’t.
Total profit/unit is $2.
Profit from sawdust/unit is $2.
If there is no no potential for sale of sawdust there is no profit.
If there is no profit then please explain how the sale of the bookshelf is enough to justify selling the bookshelf?
That’s right. And the potential profit of selling the bookshelf, even if it is a guaranteed 100% paid in advance sale, is not enough to make the carpenter build a bookshelf. By this bizarro world logic he wouldn;t build bookshelves.
Wrong. Totally worng. If you didn’t keep ducking simple quetsions you would see by now why this is obviously wrong. The profit on sawdust may in fact be the prime determinenat of the carpenter’s decision to build a bookshelf.
Sight. I am one of thos epeople who belive in fighting my iognorance instead of refusing to confront it.
Look dude InvisibleWombat was talking about beasts slaughtered for producers, by producers. That is the fact, and npobdoy ios syaingit is in error. We are discussingt he way that 99.999999% of cattle are slughteeed, which is by an abbatoir, for off-farm consumers. Do you not see why InvisibleWombat’s post is irrlevant to your confusion? If you really don’t I will happily explain it in more detail.
I ask you simple questions, you refuse to answer them.
I point out the flaws in your ‘reasoning’, you refuse to acknowledge them
I ask for references, you refuse to provide them.
Seriously LittleNemo, at least three people in this thread have pointed out exactly exactly the same flaws in your reasoning. In excruciating detail. Every single post you make contains the same. Nobody at all agrees with what you say. You have no references to suport what you say.
Do you think it’s worth ocnsidering that you are wrong?
We can help those who are ignorant through lack of information. If you are being willfuly ignornat then you are beyond help. If you can’t be bothered answering very simple quetsions in order to help us determine what it is you fial to grasp then you are quite clearlybeing willfully ignorant.
I wanna play!
You have, of course, set up an absurd scenario, one that suits your purpose, but we’ll run with it a ways:
So tell me Little Nemo, using this example, what percentage of our carpenter’s profits are represented by sawdust sales?
Sixth grade arithmetic; 100%, but that’s based on an absurd analogy. If 100% of his profit came from sawdust, he’d eliminate the chore of making bookshelves and simply produce sawdust and sell that. Here’s where your analogy fails: While it’s possible to produce sawdust without the annoyance of building bookshelves, it is not possible to produce an animal hide without slaughtering the animal that the hide is hiding. 
-
How much profit will he make if the demand for sawdust vanishes altogether?*
Impossible to determine. He’ll adjust his business model according to the beloved supply and demand. -
How many bookshelves do you suppose he will make if the demand for sawdust vanishes altogether?*
As many as he can sell at a profit, using a reasonable business model. We already know that he won’t make any bookshelves if the only profit comes from sawdust, he’ll simply make sawdust.
Now that that’s been disposed of:
Therefore, cattle hides currently account for $6.52 per hundredweight of live steer prices.
cite
Current live steer prices:
This means that 1,100 to 1,485 pound choice steers are selling for $90.97 per hundredweight.
cite
Therefore, hides represent 6.52/90.97 or 7.2% of the value of a slaughter steer. This is current, and the percentage of value for hides fluctuates dramatically. The first cite points out that recently, hides accounted for roughly 50% less than today.
Meat packers don’t even approach operating for the money they get from hides.
Wet hides fresh from the slaughtered animal bring about $85. (1300 pound steer X $6.52 per Hundredweight.) Finished hides, ready for use as rugs, etc., can be purchased for about $155 each. (google it, if you wish) Consumers cutting back on leather purchases could have a dramatic effect on the price of finished hides, but very little effect on the number of cattle slaughtered.
Also, there is about a two year lag time between the day when a beef producer decides to breed a cow to produce a calf and the day that calf is ready for slaughter. Production decisions aren’t made on quickly fluctuating prices, but long time trends.
I conclude that over time, getting enough people to eat less beef would lower the number of cattle going to slaughter but reduced leather consumption would have a negligible effect.
If that were so, the (basic) price of untreated hide would be zero. It isn’t.
I’m not arguing that leather is the major determinant of cattle numbers in the US, just the prices of all the products jointly produced count in determining output. Is leather a minor part of the cattle industry in the US? Sure, but it counts. In India, as I mentioned, it’s the other way around.
Now, there is a small point lurking in here that maybe we can agree on: not all cattle producers sell all the cattle products. Some specialise in meat, some in hides, some in dairy. In some regions or at some scales it may not be profitable to sell the hides. At the high end of leather production, it may not be profitable to bother to sell the meat.
I should finish that last point. If the demand for leather increases, all sorts of people will try to make a buck out of it:[ul][]Existing producers of both meat and hide will increase production[]Some who specialise in meat or dairy production will find it now worthwhile to sell hides[]Some people will find it profitable to move into the cattle business[]Holders of stocks of belts and jackets will find it worthwhile to clear out their cupboards, manufacturers of leather sailing accessories will consider switching to vinyl (as will consumers of noelty lifestyle products) etc, etc. Not instantaneously, perhaps not perfectly, but adjustment on all margins.[/ul]
I don’t think there is anyone in the US raising cattle for the hides alone. At least I’ve never even heard of hide prices being a consideration. A beef animal is generally sold on the hoof, and the seller has no further interest in the various parts. The meat packing company disposes of by-products as best serves their interests.
With dairy cows, the main production objective is dairy products. Retired dairy cows are sold at cutter/canner grades for lower priced meat products, including pet foods.
John Carter, I know my scenario was absurd. I have said so several times. It is the most extreme hypothetical situation possible. It was deliberately set up that way to help LittleNemo understand why he can’t simply say “beef is worth much more than leather, therefore leather has no imapact on beef cattle production”.
Once he can get the right answer to the questions regarding that very simplistic and extreme model we can start adding levels of complexity to reflect reality. But he needs to be able to walk before he runs.
As you say, the effect of reducing leather sales is minor, but it is not non-existent, which is what LittleNemo seems to believe. The OP asked what the effect would be. Nothing at all is not the answer. Negligible may well be.
But I covered al this in my very first post so there’s little value in repaating it.
It’s not my analogy. Little Nemo introduced the analogy of the carpenter. I was trying to point out the obvious flaw in concluding sawdust had no imopact at all on production.
Once LittleNemo can answer questions with big whole number answers like “100%” we can start working on more complex questions concerning relative contirbuitions to profit margins and different business models.
The whole bookshelf argument is a bunch of crap because nobody needs a bookshelf to survive. People have to eat. People’s food decisions are made by many different factors, but a major one is price. As the price of meat goes down, more people will be able to afford to eat more meat and less PBJ and Ramen noodles and instant oatmeal. More people eating more meat can only mean that more animals are slaughtered. Does this neglect feed cost and water rights issues, etc? yes, but normal consumption by an individual is not going to dramatically affect these factors. They are based on things like weather and politics.
I’m sorry, Blake, I’ve tried to make this as simple as possible. But you don’t seem to be getting it - you keep talking about profit and what you’re saying about profit is correct. But I’m talking about a different subject and and what I’m saying is correct on that subject. Go back and reread the OP and reread my responses; maybe you’ll see what I’m saying.
I think the problem is that you’re trying to apply a general theory to an area where the exception applies and I’ve skipped ahead and am using the specific model that applies to this area. I don’t dispute the general theory is correct overall; I’m just saying it doesn’t apply here. And I will mention again, that while you are accusing me of providing no cites (and haven’t provided any of your own), I have in fact pointed to an actual cattle producer who says the economic model I am describing is the correct one in this case.
And finally, you really should lighten up a little.
I’m sorry Little Nemo. At least three people in this thread have tried to point out that your posts have been ignorant in the extreme. Nobody at all agrees with you. You have no refernces to support what you say and all of your arguments are discredited as soon as you post them. You pointedly refuse to answer simple questions that would enable us to establish unambiguously where you are making your mistakes.
There’s nothing we can do about that. And so long as you stop posting this ignorance here as though it had some basis in fact I for one will happily ignore you. That’s about the best I can hope for. I have no doubt that any lurkers can see your posts for what they, particularly given your refusal to answer simple questions or acknowledge anyones criticisms of your posts. Al the ignorance that is going to bne fought here has been fought. As many other posters here have said, wilfull ignorance can’t be fought.
It seems to me that you’re looking at the wrong extreme. Suppose the carpenter makes zero profit on the sale of sawdust–suppose that sawdust is so plentiful that competition has driven the economic profits from the provision of sawdust to zero. The carpenter can only sell sawdust at the market price–and that price is just enough to cover his costs–he can make no profit from the sale of sawdust.
In other words, the cost of gathering and bagging the sawdust is equal to the market price of sawdust.
Suppose demand for sawdust falls, does his provision of bookcases fall?
I have to say that the guy you’re arguing against is right, and you’re unable to see it.
Blake, you seem to be looking for an argument that I’m not willing to give you. Throughout this discussion I’ve acknowleged that what you are saying is correct; it’s just not relevant to what we’re discussing. I’ve explained what I’ve said at great length and, despite what you’re claiming, several other posters seem to understand what I’m saying. But you continue to discuss something that is simply not an issue here and claim that I’m somehow wrong on a subject that I’ve haven’t discussed at all except to say I’m in complete agreement with you.
Sure, because then he has to pay someone to take the stuff away.
[Note that for a profit maximising firm “the cost of gathering and bagging the sawdust is equal to the market price of sawdust” MUST be true for the last bag of sawdust.]
Free disposal. If he doesn’t sell it it’ll blow away in the wind. So, does a fall in the demand for sawdust reduce his provision of bookcases?
In this case, the cost of bagging the sawdust is equal to the market price of sawdust for EVERY bag of sawdust. Zero economic profits, constant marginal cost.