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Whoa_Nelly Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:25 PM
Original message
Need HELP & Sources re: email Price of eggs compared to gas
I received this ridiculous email from a friend today. However, this friend is just learning about what is really going on AND is open to credible sources of information.

I want to explain to her about EPAct 2005 and the effects it's now having on the greedy rise of gas at the pump.

Below is the inane email. Am asking for some input with source links that will help dissuade this friend from the idea that what we do at the pump could make a difference. I want to show this friend the real reasons why we are being fucked over at the pump due to the greedy self-serving asshats at the helm of our nation and those controlling the Senate.

Thanks in advance for your resource links and info. :hi:

The Email:

>A man eats two eggs each morning for breakfast. When he goes to the
>grocery store he pays .60 cents a dozen. Since a dozen eggs won't last a
>week he normally buys two dozens at a time.
>
>One day while buying eggs he notices that the price has risen to 72
>cents. The next time he buys groceries, eggs are .76 cents a dozen. When
>asked to explain the price of eggs the store owner says, "the price has
>gone up and I have to raise my price accordingly".
>
>This store buys 100 dozen eggs a day. I checked around for a better
>price and all the distributors have raised their prices. The
>distributors have begun to buy from the huge egg farms. The small egg
>farms have been driven out of business.
>
>The huge egg farms sells 100,000 dozen eggs a day to distributors. With
>no competition, they can set the price as they see fit. The distributors
>then have to raise their prices to the grocery stores. And on and on and
>on. As the man kept buying eggs the price kept going up. He saw the big
>egg trucks delivering 100 dozen eggs each day. Nothing changed there.
>
>He checked out the huge egg farms and found they were selling 100,000
>dozen eggs to the distributors daily. Nothing had changed but the price
>of eggs.
>
>Then week before Thanksgiving the price of eggs shot up to $1.00 a
>dozen. Again he asked the grocery owner why and was told, "cakes and
>baking for the holiday". The huge egg farmers know there will be a lot
>of baking going on and more eggs will be used. Hence, the price of eggs
>goes up. Expect the same thing at Christmas and other times when family
>cooking, baking, etc.happen.
>
>This pattern continues until the price of eggs is 2.00 a dozen. The man
>says,"there must be something we can do about the price of eggs".
>
>He starts talking to all the people in his town and they decide to stop
>buying eggs. This didn't work because everyone needed eggs. Finally, the
>man suggested only buying what you need.
>
>He ate 2 eggs a day. On the way home from work he would stop at the
>grocery and buy two eggs. Everyone in town started buying 2 or 3 eggs a
>day.
>
>The grocery store owner began complaining that he had too many eggs in
>his cooler. He told the distributor that he didn't need any eggs. Maybe
>wouldn't need any all week.
>
>The distributor had eggs piling up at his warehouse. He told the huge
>egg farms that he didn't have any room for eggs would not need any for
>at least two weeks.
>
>At the egg farm, the chickens just kept on laying eggs.
>
>To relieve the pressure, the huge egg farm told the distributor that
>they could buy the eggs at a lower price. The distributor said, " I
>don't have the room for the %$&^*&% eggs even if they were free".
>
>The distributor told the grocery store owner that he would lower the
>price of the eggs if the store would start buying again. The grocery
>store owner said, "I don't have room for more eggs. The customers are
>only buy 2 or 3 eggs at a time". "Now if you were to drop the price of
>eggs back down to the original price, the customers would start buying
>by the dozen again".
>
>The distributors sent that proposal to the huge egg farmers. They liked
>the price they were getting for their eggs but, them chickens just kept
>on laying.
>
>Finally, the egg farmers lowered the price of their eggs. But only a few
>cents. The customers still bought 2 or 3 eggs at a time. They said,
>"when the price of eggs gets down to where it was before, we will start
>buying by the dozen."
>
>Slowly the price of eggs started dropping. The distributors had to slash
>their prices to make room for the eggs coming from the egg farmers. The
>egg farmers cut their prices because the distributors wouldn't buy at a
>higher price than they were selling eggs for.
>
>Anyway, they had full warehouses and wouldn't need eggs for quite a
>while.
>
>And them chickens kept on laying.
>
>Eventually, the egg farmers cut their prices because they were throwing
>away eggs they couldn't sell. The distributors started buying again
>because the eggs were priced to where the stores could afford to sell
>them at the lower price.
>
>And the customers starting buying by the dozen again.
>
>Now, transpose this analogy to the gasoline industry.
>
>What if everyone only bought $10.00 worth of gas each time they pulled
>to the pump. The dealers tanks would stay semi full all the time. The
>dealers wouldn't have room for the gas coming from the huge tank farms.
>The tank farms wouldn't have room for the gas coming from the refining
>plants. And the refining plants wouldn't have room for the oil being off
>loaded from the huge tankers coming from the Middle East.
>
>Just $10.00 each time you buy gas. Don't fill it up. You may have to
>stop for gas twice a week but, the price should come down.
>
>Think about it.
>
>As an added note...When I buy $10.00 worth of gas,that leaves my tank a
>little under half full. The way prices are jumping around, you can buy
>gas for $2.65 a gallon and then the next morning it can be $2.15. If you
>have your tank full of $2.65 gas you don't have room for the $2.15 gas.
>You might not understand the economics of only buying two eggs at a time
>but, you can't buy cheaper gas if your tank is full of the high priced
>stuff.
>
>Also, don't buy anything else at the gas station, don't give them any
>more of your hard earned money than what you spend on gas, until the
>prices come down..
>
>**_Everyone should read this and send it on! _**
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wryter2000 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:32 PM
Response to Original message
1. Oil doesn't sit around going bad
Edited on Tue Apr-25-06 01:33 PM by wryter2000
One obvious problem with the comparison is that oil can be stored indefinitely, unlike eggs.

But seriously, if you buy the same number of eggs as you always did, nothing changes in the numbers of eggs sold. You only cause yourself the grief of having to go to the store every day. Does your friend really want to have to make multiple trips to gas stations while everyone else is doing the same thing? Imagine the headaches that would cause.

On edit: that probably doesn't help you, but at least I gave you a kick.
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Whoa_Nelly Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:44 PM
Response to Reply #1
6. Thanks for the kick
and the obvious and erroneous analogy of apples to oranges/eggs to gas. :hi:
Am using it in part in my reply to my friend.
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TheFarseer Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:35 PM
Response to Original message
2. That's stupid
Didn't they still eat the same amount of eggs? It never said anywhere that they cut back. Just like gas, they would still need to buy the same amount of gas, maybe even more if they have to go out of their way to buy gas. This is counterproductive IMO.
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Whoa_Nelly Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:50 PM
Response to Reply #2
8. Yes, it is a stupid analogy
So, am looking for actual articles/links re: the effect of EPAct 2005 in direct relation to the current rise in gas prices.
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Duer 157099 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:36 PM
Response to Original message
3. There was a thread a few days ago about this
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Whoa_Nelly Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:52 PM
Response to Reply #3
9. Thanks for the DU link
Went there, but didn't find any source links to the reasons that the prices are being falsely inflated, and even more specifically to EPAct 2005.

Thanks for taking the time to reply here :hi:
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SidDithers Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:38 PM
Response to Original message
4. Fine, except refineries can control production rate...
and if their inventories are too high, they just shut down production for a short time, and lay off a bunch of workers to trim costs during down time.

Then when inventories drop, they'll step up production again until inventories are full.

Sid
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TygrBright Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:42 PM
Response to Original message
5. Wouldn't change a thing.
In fact, the store owners would have a bloody orgasm if people switched from buying 12 eggs once a week to 2 or 3 eggs every other day. More trips to the store means more impulse buying. Every time Mrs. X came in to buy her 2-3 eggs, she'd just happen to remember that she needed cleanser, or baked beans, or bananas. And to get to the egg case she'd have to pass all those "special promotion" sales displays, and think "ooooh... A dollar a pound for jelly beans, good deal, get me some of those!"

The store's net sales would go through the roof and the number of eggs sold wouldn't change a bit.

It would only change if people said "Screw two eggs in the morning every morning, I'll have eggs on Sunday and cornflakes every other day."

THEN the price of eggs would be affected.

geeeeesh, the Internet is even degrading the quality of Bad Analogy.

dismissively,
Bright
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Whoa_Nelly Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:54 PM
Response to Reply #5
10. ROFL You're absolutely right!
Love this:
"Screw two eggs in the morning every morning, I'll have eggs on Sunday and cornflakes every other day."


Thanks :hi:
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Atman Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 01:45 PM
Response to Original message
7. First of all, no one should eat two eggs a day.
Yikes. That guy is probably wondering why he's fat and has high cholesterol and is on twenty meds which cost him a gazillion dollars a month. Everything else about the comparison is pretty dumb, too, though.
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justice1 Donating Member (483 posts) Send PM | Profile | Ignore Tue Apr-25-06 02:16 PM
Response to Original message
11. Big difference between eggs and oil.
As the price of eggs increased, other farmers would get into the egg business. That would push the price of eggs down, before it went to $2.00. As the prices dropped more people would get out of the business.

We are at the mercy of oil producers.
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 02:18 PM
Response to Original message
12. If eggs get too expensive I can always buy cereal or PopTarts
And, I only eat a couple eggs/day.
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sable302 Donating Member (597 posts) Send PM | Profile | Ignore Tue Apr-25-06 02:20 PM
Response to Original message
13. hens are always laying more eggs
and making more chickens


Who's gonna make more oil when it's all gone?
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warrens Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 02:25 PM
Response to Original message
14. Classic apples and oranges thinking
Eggs go up in price for a variety of reasons, including feed prices, transportation prices, demand, etc. Lowering it to simply demand is simple-minded. Oil doesn't just keep backing up if it isn't selling. The owner just caps the well and waits for demand to return. As someone pointed out above, it doesn't go bad and demand is not elastic; if you drive 200 miles a week, you need X amount of gas, period. You can switch to tofu if eggs cost too much, but you can't switch fuel products at will.
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ComerPerro Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 02:30 PM
Response to Original message
15. Try using an argument like this:
1980
Cost of a gallon of regular gas: $1.25
Cost of a dozen eggs: $0.91

1984
Cost of a gallon of regular gas: $1.21
Cost of a dozen eggs: $1.01

1988
Cost of a gallon of regular gas: $1.08
Cost of a dozen eggs: $0.89

1992
Cost of a gallon of regular gas: $1.13
Cost of a dozen eggs: $0.93

1996
Cost of a gallon of regular gas: $1.23
Cost of a dozen eggs: $1.31


1998
Cost of a gallon of regular gas: $1.06
Cost of a dozen eggs: $1.09




Now compare the cost of gas now, to the cost of eggs...

I know its irrelevant because they have different driving factors, but why is it that the price of gas has more than doubled in five years but nothing else has increased at even close to such a rate.

Moreover, the price of gas from those figures never doubled even over twenty years!!!!

And those aren't adjusted dollars, either!

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Whoa_Nelly Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 03:01 PM
Response to Reply #15
16. Good reply!
Thanks :hi:
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Kittycat Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-25-06 05:44 PM
Response to Original message
17. I buy Organic eggs at $3.09-3.99/dozen
Pointless remark, but just sayin'
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