Edmonds Community College Microeconomic Concepts Questions Make sure to respond to the questions based on the articles. Try to include any relevant microec

Edmonds Community College Microeconomic Concepts Questions Make sure to respond to the questions based on the articles. Try to include any relevant microeconomic concepts or thinking as derived from your readings. Thank you!!

#4: The American Cherry Industry Falters.
What might be the best approach to help out the American cherry farmers? (Read the “Cherry Capital of the U.S. Faces…” file)

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#5: Soaring Meat Prices.
What might be a possible response to these soaring prices for meat in China and the world overall? (Read the “Meat Is Getting Pricier Because China…” for this)

#6: Sears, Once the Amazon of the 20th Century – Falls.
What might have been done to save Sears and to help it compete more effectively in the 21st century? (Read the “Inside the Decline of Sears…”) Cherry Capital of the U.S. Faces Threat From
Turkish Imports; In Michigan, some growers
chop down trees or leave crop on the ground as
prices tumble
Keith King for The Wall Street Journal . Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29
July 2019.
ProQuest document link
FULL TEXT
WILLIAMSBURG, Mich.—Dorance Amos pulls handfuls of tart red cherries out of large tanks filled with cold water,
looking for blemishes. “These will grade well,” he says.
The apparent bounty hides a grim reality: He hasn’t made a profit in three years.
Mr. Amos is one of many Michigan tart-cherry farmers struggling amid a flood of low-price dried cherries from
Turkey. The industry petitioned the U.S. government to impose duties on the imports, claiming Turkish importers
underprice the fruit and the Turkish government unfairly subsidizes the industry. The U.S. government said in June
that there was enough evidence to proceed with an investigation.
“If we don’t have luck with the tariffs, I don’t know how any of us can survive,” Mr. Amos said.
The fight centers on the tart Montmorency cherries grown around nearby Traverse City, which is nestled along
Lake Michigan’s Traverse Bay, about four hours northwest of Detroit. The region has crowned itself the cherry
capital of the U.S., where it supplies two-thirds of the country’s supply of tart cherries. It battles the state of
Washington for the title, where more sweet cherries are grown.
About 300 million pounds of tart cherries worth about $56 million were produced in Michigan last year. Almost the
same amount was worth $107 million in 2014, according to USDA data. Tart cherries are used for pie filling and
juice, or are dried and put into cereal and breakfast bars. Neat rows of cherry trees resembling Mediterranean
groves line the highways around the region. The sandy loam soil and proximity to Lake Michigan, which moderates
the climate, creates rich ground for the fruit to grow. Tart cherries are a small crop compared with the much larger
sweet cherry industry, which produced 344,400 tons of fruit in 2018 worth $638 million.
The tart-cherry industry collectively agrees to freeze or destroy a percentage of their crops annually to ensure price
stability for the overall market. Some Michigan processors—the companies that pit, freeze and dry the
cherries—are now selling old inventories of frozen cherries at discounted prices because keeping them is too
expensive due to the flood of cheap Turkish product. That has put even more low-cost cherries on the market.
A fourth generation Michigan cherry farmer, Mr. Amos mowed down 60 acres of tart-cherry trees last year because
harvesting the fruit was more expensive than selling it.
Share Your Thoughts
Is it more important to you to get cheap fruit or to buy fruit grown by U.S. farmers? Join the conversation below.
He’s not sure what he’ll do this year. He’s hoping he has enough money to harvest the rest of his 375 acres, which
is done by applying a mechanical shaker to a tree. The loosened cherries fall into another machine.
If he can’t harvest all the fruit, he might have to abandon some of his orchards, a practice that can allow pests to
fester and make their way to nearby trees and neighbor’s farms.
Turkish imports of tart dried cherries have nearly doubled annually over the last three years to 1.5 million pounds
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in 2018, selling at 89 cents a pound. U.S. processors sell the same product for about $4.60 a pound, according to
data from USDA.
The average price per pound that growers could command for tart cherries dropped from 27 cents a pound in 2016
to 20 cents a pound last year, according to USDA data.
In a May letter to the Department of Commerce, the Turkish government disputed the charges leveled by the U.S.
cherry industry. The letter said the programs provided to Turkish cherry farmers are either no longer in use or
provide negligible support. Turkey also said it is concerned about the growing number of trade investigations by
the U.S. government. A representative for the Turkish embassy to the U.S. declined to comment.
The U.S. International Trade Commission made a preliminary ruling in June that Turkish imports “had a significant
adverse impact on the domestic industry.” A final ruling is expected early next year. The Department of Commerce
will simultaneously determine the duties to be imposed if Turkish imports are determined to be injurious to the
U.S. market.
For this region of northern Michigan, cherry farming is often a family affair. Farms and processing plants have
been owned for generations. High-school students spend their summers working 12-hour days in the field along
with seasonal workers from Mexico. Thousands of employees work in the processing plants year round, pitting,
freezing and drying cherries.
Nels Veliquette, chief financial officer for Cherry Ke Inc., works with his brother, Bruce, to run the orchards and
processing plants that were founded by his father and uncles in 1969. Earlier this year he had to lay off 20% of the
employees, or about 25 people, who work all year at his dried cherry plant.
If the industry loses its case against Turkey, he thinks a few cherry growers will make it, but it will be nothing more
than a niche tourist attraction. The regional industry that has supplied a livelihood to farmers for generations will
die. He says he’s more optimistic than most.
“All this beauty exists because I can make a living at it,” he said. “If I can’t make a living, there won’t be a farm
here.”
Write to Shayndi Raice at shayndi.raice@wsj.com
Credit: By Shayndi Raice | Photographs by Keith King for The Wall Street Journal
DETAILS
Subject:
Agriculture; Farmers; International trade; Loam soils; Farms; Fruits
Location:
Mexico Turkey United States–US Detroit Michigan Lake Michigan Michigan
Company / organization:
Name: Department of Commerce; NAICS: 926110; Name: Department of Agriculture;
NAICS: 926140; Name: International Trade Commission–ITC; NAICS: 926150,
928120; Name: Wall Street Journal; NAICS: 511110
Lexile score:
1370 L
Publication title:
Wall Street Journal (Online); New York, N.Y.
Publication year:
2019
Publication date:
Jul 29, 2019
column:
U.S. News
Section:
US
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Page 2 of 3
Publisher:
Dow Jones &Company Inc
Place of publication:
New York, N.Y.
Country of publication:
United States, New York, N.Y.
Publication subject:
Business And Economics
Source type:
Newspapers
Language of publication:
Eng lish
Document type:
News
ProQuest document ID:
2265736990
Document URL:
http://edmonds.idm.oclc.org/login?url=https://search.proquest.com/docview/22657
36990?accountid=1626
Copyright:
Copyright 2019 Dow Jones &Company, Inc. All Rights Reserved.
Last updated:
2019-07-30
Database:
eLibrary,US Newsstream
Database copyright ? 2019 ProQuest LLC. All rights reserved.
Terms and Conditions
Contact ProQuest
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Page 3 of 3
Meat Is Getting Pricier Because China Is Peckish for
Protein
After a swine disease decimated its pig herd, Chinese
demand is driving up beef, pork and poultry prices worldwide
China’s domestic pork prices have jumped by as much as 50% as production there has shrunk.
Hong Kong shoppers buying frozen pork earlier this year. Photo: Kin Cheung/Associated Press
By Lucy Craymer and Jacob Bunge
Sept. 23, 2019
China is on a global meat-buying spree, pushing up beef, pork and poultry prices around the
globe as the world’s most populous nation scrambles to fill a large void in its meat supply.
Meat buyers for China are ramping up purchases after a swine disease hit hog farms across the
country and reduced its pig herd—the world’s largest—by more than a third. Domestic pork
prices have surged and China’s meat imports are swelling in response, straining global supplies
and sending ripples across the global economy.
In Brazil, poultry shipments to China have jumped 31% from a year ago and retail prices for
chicken breasts, thighs and legs have increased roughly 16%. Shoppers in Europe are on average
paying 5% more for pork, because more domestically produced meat is being sent to China.
Lamb prices in Australian grocery stores have jumped 14%, while ground beef on shelves in
New Zealand now fetches record prices.
Meaty Issue
A swine disease that has wiped out more than a third of China’s hogs has left a huge pork
shortfall.
China’s world-wide hunt for meat means that in Melton Mowbray, a British town of some
27,000 people known for its pork pies, prices for the thick-crusted pastries are going up. The
U.K.’s Agriculture and Horticulture Development Board, a farmer-funded body, in September
said Chinese demand helped push domestic hog prices to their highest level since November
2017.
One of the town’s bakeries, Dickinson & Morris, has increased prices of pies filled with uncured
British pork by 10% to 15% to £3.99 ($4.98) for an individual pie, to help offset a 26% rise in
wholesale meat prices.
“There is just not enough pork around,” said Stephen Hallam, managing director of the company,
which sells about 4,000 pork pies a week at its store and distributes them to other retailers.
China’s heavy buying is the result of the country’s yearlong struggle to control the spread of the
deadly African swine fever virus, which has led many farmers to cull hog herds and stop
breeding new pigs. The country is now facing a historic pork shortfall while it remains locked in
a trade war with the U.S., whose food and agriculture exports to China have plunged following
rounds of tit-for-tat tariffs.
American shoppers so far haven’t felt much price impact from China’s meat purchases, but that
could soon change. December-dated U.S. lean hog futures have climbed 4.5% so far this month,
rising after Chinese officials said the country could exempt U.S. pork and some other agricultural
goods from punitive tariffs, though President Trump on Friday said the U.S. didn’t need to
complete a trade agreement with China before the 2020 election.
Many U.S. meat companies watched over the past year as competitors in Europe and South
America raced to supply China’s pork needs. In time, executives of Tyson Foods Inc., TSN 1.83% Smithfield Foods and Sanderson Farms Inc. SAFM -0.64% said they expect to benefit
from higher prices, as China’s rising imports draw down global meat supplies.
Workers wearing protective suits sent pigs to be culled on Sept. 17 at a Paju, South Korea, farm
where some have been confirmed with African swine fever.
“Anytime that there is that amount of protein that is lost from a global perspective, there is going
to be an impact on price,” Noel White, Tyson’s chief executive, said during a September investor
conference.
Chinese consumers eat 122 billion pounds of pork a year primarily in dishes such as dumplings,
meatballs and stir-fried dishes. The vast majority of that has previously been sourced locally.
Analysts are now estimating that swine fever will cut China’s pork production by as much as
35.7 billion pounds in 2019—which is almost double the amount of pork traded internationally
last year.
Beefing UpMeat prices globally have climbed to a four-year high after China stepped up imports
ofpork beef, chicken and sheep meat.FAO Meat Price IndexSource: Food and Agriculture
Organization
African swine feveroutbreak in China2015’16’17’18’19140150160170180190
As domestic pork prices have jumped as much as 50%, there have been some attempts by
Chinese government officials to ration pork or encourage people to buy chicken and other meats
instead.
Between May and July, Chinese imports of pork, chicken, beef and sheep meat jumped nearly
70%, totaling more than $5 billion in value, pushing up meat prices around the world. The
United Nations Food and Agriculture Organization’s global meat price index, which takes in
price movements of beef, sheep meat, pork and poultry, has climbed 10% this year to its highest
level since early 2015.
You may also like
Up Next
U.S. Farmers on China Tariffs: ‘This Isn’t Just a Chess Match’
The trade war with China is putting a strain on the U.S. agriculture industry. WSJ’s Jason Bellini
sat down with a group of farmers from the corn, beef, soybean, and dairy industries to hear how
tariffs are affecting their businesses.
In Brazil, Beijing officials recently approved an additional 25 meat processing factories to export
meat to China, increasing the number of export-certified Brazilian meat plants to 89—including
a donkey-processing facility—according to a statement by the Brazil’s Ministry of Agriculture,
Livestock and Supply.
BRF SA, BRFS +0.54% one of Brazil’s largest meat processors and poultry exporters, is
increasing export capacity of pork and chicken by about 30% in part to meet Chinese demand
while keeping the local market supplied.
How will China’s meat-buying affect U.S. consumers?
Chinese importers are looking to buy three times the amount of meat they usually purchase, said
Patricio Rohner, BRF’s international vice president. Brazilian consumers are paying more for
chicken as a result and further price increases are possible, he said.
In neighboring Argentina, where many consider beef a way of life, some locals are going without
the red meat as prices surge. A combination of inflation and soaring exports to China—beef
shipments more than doubled this year, while poultry climbed 68%—have pushed steak prices
51% higher compared with a year ago, according to industry data.
A customer buying poultry at a market stall in Beijing this year. Chinese imports of pork,
chicken, beef and sheep meat rose nearly 70% between May and July. Photo: Gilles
Sabrie/Bloomberg News
At Café Anselmo, a restaurant in Buenos Aires’ historic San Telmo neighborhood, menu prices
for sirloin steaks and milanesa are one-fifth higher than they were at the beginning of the year,
said manager Amorina Orosco. Some residents are buying less meat, and “all of us expect the
prices are going to increase,” she said.
ElPozo Alimentación SA, one of Spain’s largest pork companies, is making decisions about how
much of the meat to supply to domestic markets and what to send to China, where it can get
more money. In Spain, even cheaper cuts of meat—such as pig trotters—are disappearing from
the local market because they can be sold for much more in China, said John Hickin, regional
sales director in Asia for ElPozo.
Simon Linke, an export manager at trading firm Samex Australian Meat Co., said Chinese
buyers are outcompeting U.S. and Middle Eastern importers to lock up Australia’s meat supplies.
In North Sydney, Australia, Tender Gourmet Butchery is feeling the effects of China’s hunger
for meat. Store manager Ron Bergan said lamb has become so expensive that the store can’t pass
all its cost increases on to customers without losing sales.
Instead, he said, the store is reducing its profits. He is selling lamb cutlets for about $20.29 a
pound—roughly 10% more than a year ago.
“Nothing is easy in the meat industry,” said Mr. Bergan, noting that domestic supplies had
already been tight after droughts reduced the size of Australian cow and sheep herds.
Inside the Decline of Sears, the Amazon of the
20th Century; The latest sign of trouble for the
retail icon comes from manufacturers
demanding early payment and withholding
products
Kapner, Suzanne . Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Oct 2017: n/a.
ProQuest document link
FULL TEXT
Shoppers hunting for this holiday season’s hot toy, the L.O.L. Surprise, may have trouble finding it at Sears or
Kmart stores. Worried about the financial health of the retail chains, the company that makes the toy, a ball that
children unwrap to reveal small dolls, has reduced shipments to Sears Holdings Corp.
“We cut their credit line and shortened payment terms,” said Isaac Larian, chief executive of toy maker MGA
Entertainment Inc. “If they pay one day late, we will cut them off.”
Sears once dominated American retailing and helped build famous brands, including Whirlpool appliances,
Craftsman tools, Schwinn bicycles and Allstate insurance. Now, bleeding cash and losing shoppers, the 124-yearold company is scrambling to keep suppliers–the lifeblood of any retail chain–from bolting.
To guarantee shipments from LG Electronics Inc. and Samsung Electronics Co., Sears is paying them cash up front
for some goods, said people familiar with the matter. Levi Strauss &Co. has stopped supplying women’s jeans to
the chain, said another person. At Clorox Co., “We have certainly adjusted our payment terms,” said CEO Benno
Dorer.
A monthslong feud between Sears and Whirlpool Corp. burst into the open last week when the sides couldn’t agree
on terms to keep their century-old partnership going. Earlier in 2017, Sears sued two longtime manufacturers of its
Craftsman tools to keep them shipping merchandise to stores.
The supplier turmoil is the sharpest sign yet of Sears’s decline. It has lost more than $10.4 billion since 2011.
Annual sales over that period have collapsed to $22.14 billion from $41.57 billion as the company has spun off
divisions, closed hundreds of stores and attracted fewer shoppers to its 1,250 remaining Sears and Kmart
locations.
Employee ranks, above 300,000 a decade ago, have dropped by more than half. This year Sears lost state tax
breaks when the number of employees at its Hoffman Estates, Ill., headquarters fell below a 4,250 threshold. Sears
is looking to lease out part of its headquarters space, and some amenities that once dotted the six-building
campus, including a bank branch and optical shop, have closed.
Though Sears is slashing costs , credit analysts say it needs to raise about $1.5 billion a year to fund its
operations. On Monday, S&P Global Ratings downgraded Sears’s debt further into junk territory, on concerns the
company could have trouble repaying or refinancing $1 billion in loans coming due next year.
Analysts say Sears still has assets to sell to keep it afloat. And as long as it continues to pay on time, suppliers are
unlikely to abandon it. Many say they want Sears to stay in business but have taken the harder position on
payment terms to protect themselves.
A Sears spokesman said the company has taken a number of steps “to remain a viable competitor,” including
closing unprofitable stores, negotiating “with vendors to reduce their risk in doing business with us,” investing in
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its customer-loyalty program and reducing costs.
The spokesman, Chris Brathwaite, added that “inaccurate assertions and negative speculation about Sears and its
future” have “had a very detrimental impact on the company through mere repetition.” He didn’t reply to specific
questions, including about MGA, LG, Samsung and Levi Strauss.
After this article published on WSJ.com, Sears said it continues to have strong relationships with thousands of
vendors. “Any changes to our agreements over the years have been part of the normal discussions between
retailers and vendors,” the company said in a blog post.
At the center of the storm is Edward S. Lampert, the 55-year-old financier who rescued Kmart from bankruptcy and
then combined it with Sears, Roebuck &Co. in 2005. Partly through his hedge fund, ESL Investments Inc., in which
he is the primary investor, the money manager turned CEO is also Sears’s largest shareholder, with 54%. Through
ESL, he also oversees a big creditor , holding just under half Sears’s $3.5 billion or so in long-term debt.
Sears has been selling real estate and brands to raise cash and Mr. Lampert has pumped in money through shortterm loans from his hedge fund.
In weekly management meetings, Mr. Lampert pushes executives to drive harder bargains with suppliers, arguing
that the vendors need Sears as much as i…
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