But when ranchers decide to sell a bunch of their cattle all at once (bc feed is too expensive), the price goes down bc there's in an influx of supply without change in demand.
Farmers and ranchers don't set the price, but as a whole, they control the supply which effects price.
For example, if 90% of cattle farmers decided to stop raising cattle and plant corn instead, the price of corn would plummet and the price of beef would skyrocket even though farmers are price takers, not price makers.
The game theory ranchers have to play is pretty interesting. If everybody gets scared by the price of feed and culls stock, then they all sell for lower and then have much higher prices later own. If they all decide to roll the dice and pay the high feedstock, they'll be enough supply that they can't get high enough prices to offset the higher costs. Really have to zig when everybody zags. I guess that's not much different than most commodities, just seems different because growing is different than mining/drilling/whatever.
Not exactly the same game as farmers, but I remember being young and talking with a farmer and the farmer talking about weather being great and everybody having bumper crops and I said something about that being good and he pointed out that it really wasn't because basically everybody that they compete with was having a productive year, so they were all going to sell into dirt cheap prices. Said you only have a really good year when you have a big crop while supply is generally down, usually because of bad weather or whatever in another area that supplies to the same market as you. Similarly the devastating years are when you have a bad crop but supply is generally up. Then he said, just kidding, I'm getting a mid range seven figure check from the government regardless, they're all good years, suckers.
I may have made part of that conversation up, but I assume he was at least thinking it, although I didn't know it at the time.
