Chickens

Selling chickens is a really complex thing.

Long ago, in Florida, there was a distributor who sold the highest quality chickens. They wanted more people to consume their high quality chickens, so they contacted a group of chicken farmers in New York. They wanted them to sell their chickens at their Friday, Saturday and Sunday chicken fairs, which were all the rage because they were invested in for years. It was a ready made market of chicken sellers, matched with chicken buyers and they wanted in.

The local chicken sellers were wary, because their chickens were not the highest quality. With new high quality chickens entering the market, their local chicken sales would go down. Not to worry, though, because these high quality chickens were selling for $10 and the Florida people only wanted $3. The $7 in profit would be added to the overall chicken revenue pie. Sure the Northern chicken farmers would not sell as many chickens with this new entrant in the market, but they'd still have money. This money was used to market chickens, for chicken seed, trucks, trailers and other means of production.

They had to contact the state, and they said, sure you can import these chickens, but you must give us $3 of the $7 you make. then we'll let it happen. The chicken farmers agreed, and away things went. 

Things went along well. The local chicken farmers were selling fewer of their chickens, but with more of the others being bought, gross chicken sales were humming along. This was important, because chickens were fighting for market share from the big hamburger guys. They were going all out - promoting big greasy burgers with flashy commercials and low prices. They were coming after the chickens.

The Florida chicken makers were happy too, because the world was being promoted with their chickens. They were selling more chickens than they could have in the New York market.

One day, someone in Florida had a new idea, though. He thought "our chickens are more popular than their chickens, so we should charge $7 a chicken and let them keep $3 a chicken." The chicken farmers in the Sunshine State all agreed. Who doesn't want more money. Let's go get it.

Meanwhile up north, Chicken farmers began to realize this was why they were wary in the first place. If they don't pay they stifle customer choice and more people will go to the hamburger fairs, but if they do pay, they won't have as much money to support the local chicken supply chain and sales will go down too. Whatever they choose, layoffs will happen, chicken seed men will go out of business, fewer trucks and trailers will be bought. The state will still want their $3 a chicken, the costs for the local chicken fairs each weekend were high. It won't be worth it to sell chickens any longer.

Also, they've been promoting and servicing chicken customers with choice and good pricing. Because they were paying $3 a chicken and had good margin, they could have two for one chicken sales, and other promotions to encourage chicken eating. Now those would have to go away. People would run to the hamburger farmers. This was big stuff.

What should the chicken world do? Support Florida where fewer chickens are sold at higher prices and higher margins on paper allowing for more revenue? Or compete with the hamburger market by taking less off each chicken, and having a multi-facted distribution network, earning more and more chicken loving customers at a lower margin?

That's the question horse racing continues to face with the signal wars and pricing in general. It will probably not end up with a good resolution, for local horsemen, or customers.