Money Up, Money Down

This past year I have been trying to educate myself concerning economics and money. I would like to have more money for sure, but I also know the economy determines prices of things we purchase and sell. I want to understand how this economy works.

It would be easier to gain understanding by attending a few college classes, but I do not have the money to spend on college classes. So, I have been ready articles, the news and a few books to try to gain an understanding. With an understanding, I am hoping to be able to make more profit from what I do sell.

Today I was reading an article on inflation to learn what the inflation rate for the United States is for the month of September – 8.3%. Meaning that the prices for items in five categories has an average percentage gain of 8.3% higher than in August. While the prices stayed close to the same for groceries, the other categories rose. The continued rise in costs for what Americans purchase is inflation. How does inflation get stopped, the federal government raises the interest rates on loans made to banks and others. People supposedly slow down in their purchases, allowing the demand to drop, and eventually the price of items drop as there becomes a surplus.

But what happens if inflation continues to rise, and the interest rates continue to rise, people stop purchasing or greatly reduce what they purchase. If stores are not selling items, the store begin to lay people off. If companies have a surplus of product, they slow production and lay people off. Now the scenario is perfect for a recession.

In my occupation of being a sheep farmer, I believe the farmers feel a recession before anyone else. Most people consider livestock a luxury and convenience, something that they own until it is a hardship then they sell the livestock. I raise sheep for market, producing lamb meat for those who eat lamb, as an occupation. Raising sheep is my job, what I do to make money to provide income for my husband and myself.

I understand the cost to purchase a pound of meat is very high. I have seen and paid the higher prices the past few months. My grocery expense has doubled, and the amount of food purchased declined. In years past, I learned how to take a pound of meat and use it for three meals to feed my four children, spouse and myself. I know there are others who also have this ability, we learn through hardship. People making meals with less meat affects the amount of market animals needed to supply the people with meat.

I took some registered sheep for breeding stock to a special auction today. The prices on all the sheep and goats for breeding were very low. No one was really buying. A lot of the sheep and goats went to a slaughter buyer, not to someone wanting to raise market animals. I PO or purchased out two of my three animals, meaning I did not sell them. The prices were so low, it was better that I keep them and continue to raise lambs from them, as there would be more profit.

The drought causing lack of grazing, along with the cost of hay for winter feeding, many sheep farmers and hobby sheep farmers are selling all their animals. The current flooding of the market with animals has caused the price for the animals to sharply drop. This will have an effect on the price of meat and perhaps the availability of meat next year.

There will be fewer lambs this next spring, as there are fewer breeding animals to produce the lambs. The price for a market lamb will go back up. Depending on the recession, how bad it becomes and how long it lasts will affect the price of breeding stock. It may be two or three years before I can get a good price for the breeding stock I purchase.

I did not get the price I wanted for the ram I had at the sale. I was on the fence about selling him, as I can use him in the breeding of ewes for lambs. Last February, I paid $1,000 USD for a young ram. Today I could not get $750 USD for the same quality of ram.

Life goes up and down, the skill is staying afloat. I live in a rural area. I am skilled at growing some of my food. I have the ability to preserve the food and to “make it stretch” as grandma used to say. I eat some of the most expensive type of meat a person can purchase, lamb, as I butcher my own. We will stay afloat.

But how do people manage who live in cities and large towns? I know they are able to “make it stretch”, but how do they supplement their food pantry? With my limited understanding of economics, I see clearer how those living in high populations suffer more than those of us living in rural areas during times of recessions.

Regardless of where you live, I hope that all can find the answers to help them stay afloat during these expensive times.

amtolle