Comment by brandmeyer | Hacker News Reader

Comment by brandmeyer | Hacker News Reader

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Beef and hide are coupled goods. One cow produces about X kg of beef and Y m^2 of hide. If demand for beef is extra high, then it will depress the price of hide because the ratio in supply is roughly fixed between them.

There are other examples in modern society. Chlorine and caustic soda are produced in strictly fixed ratios from NaCl salt and electricity. Extra demand for one will depress the price of the other. The effect is quite sharp in this example, since both products are expensive to store.

Similarly, the hydraulic fracking industry has somewhat depressed the market price of natural gas in the US. The miners are really hunting for high-value liquid hydrocarbons. The gaseous hydrocarbons are quite low-margin by comparison, but come along for the ride in the shale being exploited right now. The effect is more modest in this example since new home construction, new electricity production, and industrial process heat can all be biased towards natural gas. But its still there.

If electric and other high-efficiency propulsion technologies takes off enough to impact gasoline consumption, then a side effect in the US will be an increase in natural gas prices. The source of the increase is twofold: Decreased production of liquid hydrocarbons will decrease supply of gaseous hydrocarbons, and increased demand for electricity will raise demand for gaseous hydrocarbons.

Why don't they just breed cows that are more spherical, to maximize the volume-to-surface-area ratio?

They're in the middle of that process.

https://www.beefmagazine.com/cow-calf/relationship-between-c...

"The amount of beef produced per cow has seen an 18% improvement over the past 20 years. The average cow size across all breeds is 1,390 lbs., with less than 100 lbs. separating the heaviest and lightest breeds."

Or more wrinkly. Increased surface area compared to a sphere. It works on brain surface area.

There's probably a tradeoff in the quality of the hide as a result of this however.

The goal is to get more beef and less leather.

I imagine most uses call for flat leather rather than curved.

So you want to breed cube-shaped cows?

If the sphere-cow is big enough, the surface will be practically flat...

> Similarly, the hydraulic fracking industry has somewhat depressed the market price of natural gas in the US. The miners are really hunting for high-value liquid hydrocarbons.

And so they have been fracking more liquidy "wetter" natural gas where possible, depressing prices for ethane, butane and propane (but which are still more profitable than methane, BTU for BTU).

Cheaper ethane = cheaper plastics as we turn on more and more polyethylene plants (easier to store/ship).

In the winter, we can froth up gasoline with butane, which is largely why winter gas is cheaper.

I can't help but get the sense that your economic materials analysis is based on a video game crafting economy. If the profitability of leather is low enough, then people will trash the raw hide but butcher and sell the beef. There's a lot of labor and logistics and materials that goes into producing the beef you cook or leather goods you buy beyond (cow) -> (meat,leather) -> (food,clothes). Remember, nobody knows how to make a pencil.

How does this contradict the point that GP made? GP did not imply that you get a free piece of leather with each cow slaughtered, just a hide.

Btw, even game economy models this part - in Dwarf Fortress a slaughtered animal produces skin, which will decompose if not tanned or converted to parchment.

They’ll trash the hides when the profitability of them reaches zero.

That still leaves a ton of room to over supply and depress prices.

Disposal costs money, too, so the "trash point" is actually at a somewhat _negative_ profitability.

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