eddie:

You beat me to it!

Paul:

"But it seems so unreasonable when YOU say it."  Exactly my point: if we actively encouraged commoditization with anything else but food, it would be immediately obvious why it's a stupid idea.  If a good can be commoditized, the market will do it by itself, with no help require from our government.

Tim W:

Apparently you have to grain-feed cattle for a long time to make them that obese...just like humans.

That being said, it is incredibly delicious.

Adeline:

You're welcome!

Franco:

There's a difference between "truth in labeling" and "you can't sell it unless it's a certain size".  From what I understand about EU commodity rules, they're often arbitrary and very restrictive, preventing people from selling goods at all.

Stipetic:

I do my best.

More to come!

JS

Sean:

I don't think we're arguing, except where you write that "a lot of what you wrote violates basic economics".  I take umbrage at that: I think you're reflexively projecting statist beliefs to me that I don't have.  Be warned that I'll throw down with you or anyone on any economic issue, anytime, anywhere 🙂

Moving on…

In a free market, commoditization would occur to the degree the market demanded it, and no more.

We don't have that.  As I mentioned, our government subsidizes commoditization through price supports on certain carefully selected crops — primarily corn, wheat, cotton, and soybeans.  This discourages the production of the food we actually want to eat, and encourages the production of fungible commodities.

"In order to compete in a commodisized market one must distinguish themselves on quality."

By definition, it is impossible to compete in a commoditized market on quality — because the definition of a commodity is “a good supplied without qualitative differentiation across a market.”  

The only way to compete on quality is to sell outside the commodity market.  Again, this is perfectly reasonable, assuming you have a free market where transportation is not a monopoly (railroads — oops), where storage is not a monopoly (grain elevators — oops), and where trade is unrestricted (government regulations on buying and selling food — oops).

Further discussion on "why real food isn't a commodity":

Raw materials, such as steel, make excellent commodities…because fungibility is a desirable characteristic for raw materials.  When casting, forging, or machining metal parts, I want to know that the metal I receive is absolutely consistent from run to run. 

Furthermore, raw materials have no value to us, as consumers: I'm willing to be that none of us has ever taken delivery of a contract of steel, copper, or October corn, because we have no way to process them into a finished product.  Even a blacksmith buys blanks cut and shaped to appropriate size.  The value is added by the manufacturers who turn raw materials into a usable, finished product.  

So it is with grains: I'm willing to bet no one here has ever bought raw wheat stalks and threshed, winnowed, and ground them into flour.  Most people don't even buy flour: we buy bread, cookies, and crackers. 

Real food, in contrast, is not a raw material: we eat it in something approximating its natural state.  In fact, that's basically the definition of real food: something we can either eat raw or prepare in our kitchen.  In this case, we value homogeneity far less than we value subjective perceptions like taste and texture, and difficult to measure qualities like nutrition.

Furthermore, homogeneity is usually achieved only by descending to the least common denominator, as I mention above in the article.

Re: trading

"Currency traders help businesses by minimizing the risk of international trades. By betting on the future value of the dollar in euros or whatever. Same thing with commodities futures."

Are you claiming that a significant proportion of commodities trading is farmers hedging their production — not traders and trading houses attempting to profit by outguessing the farmers, or by large firms frankly manipulating commodity prices and front-running their clients?  (See: $150+ oil.)

I think you have a naive view of real-life markets.

Furthermore, it is an indisputable fact that any profit made by traders comes out of the pockets of farmers and consumers.

In closing: commoditization of food is not primarily driven by consumer demand.  It's driven by government policy — and this inappropriate commoditization is destructive to food quality and our health.  Clear?

JS