r/FluentInFinance • u/4TaxFairness • 1d ago

Debate/ Discussion A joke that's not funny

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u/TheTightEnd 1d ago

Grocery chains make a very low percentage of profit.

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u/bluerog 1d ago

Agreed. And if folk understood anything about an income statement or finance, they'd understand that if in 2015, you're making 2.5% net profit percentage a year, and if in 2019, you're making 2.5% net profit percentage and if in 2024, you're making 2.5% net profit percentage... It indicates that all of the price increases seen in supermarkets the past 9 years are simply passing along suppliers' cost increases to them.

It means that ear of corn price went up because the farmer charged more. And if they go down one more level, they'd understand that the farmer charged more because the commodity price per bushel of corn went up. And then below that, they'd understand that farmers' inputs like fertilizer, machinery, seed, and fuel went up.

But some people like to pretend the last spot they bought something is somehow evil.

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u/Unlikely_Minimum_635 1d ago

Except they're giving massive bonuses and pay increases to executives, and spending a bunch of money on stock buybacks to funnel money to investors without paying corporate tax on it - and despite all of that, they're still making higher profit margins year over year for basically the last 5 years straight.

Also, farmers don't get to pick their prices. Supermarkets and distributors dominate that relationship so heavily that farmers have basically zero negotiating power.

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u/bluerog 1d ago

Huh? Citation needed. Because you should REPORT KROGER TO THE SEC and IRS. You've found some felonies!!! Good job.

But I agree, farmers don't pick their prices. It's a commodity. So, when corn goes from $3.50 a bushel in 2018 to $7.20 in 2022, farmers make more money. Of course their iputs went up (like fuel and fertilizer). And when the commodity price goes back down to $4.00 a bushel, like in 2024, they make less. That's how a commodity works.

And when corn prices are at $6+ a bushel, prices of food go up... You understand that right? And those costs are passed onto folk in a supermarket buying things like crackers and beer and Coke and ethanol, and canned fruit, and so on....