Great post. Nails the real point we often forget, follow the money. It's usually the focus and always a main factor.
I've worked decades in oil. It's a bit complex, so I'll jump to the last sentence.
Exporting crude oil loses money, but dramatically increases profits in refined goods such as gasoline, diesel, paint thinner, and that stuff in the medicine cabinet you don't quite trust.
Losses selling crude at or below cost are minimal compared to the additional profits selling refined goods at higher prices.
This is why the USA banned exporting crude oil. Exports of refined products have never been limited, except maybe during WWII, and I do mean maybe.
Substitute pine for crude oil and construction grade milled lumber for refined oil products, and change a few names, and the same story works for pine. I suspect it's the same for wheat framing and any market sector large enough that 1% cost reduction buys a yacht, or two.
I love Canadian pine, and I love that we can get such high quality here in the USA. When I've lived in Canada, always small towns, we were told that our market was so small they didn't need it at all, hint hint, so we should be delighted to get the rejects. Yeah, and we should be grateful that Tim Horton's blessed us with ONE store.
Great post. Nails the real point we often forget, follow the money. It's usually the focus and always a main factor.
I've worked decades in oil. It's a bit complex, so I'll jump to the last sentence.
Exporting crude oil loses money, but dramatically increases profits in refined goods such as gasoline, diesel, paint thinner, and that stuff in the medicine cabinet you don't quite trust.
Losses selling crude at or below cost are minimal compared to the additional profits selling refined goods at higher prices.
This is why the USA banned exporting crude oil. Exports of refined products have never been limited, except maybe during WWII, and I do mean maybe.
Substitute pine for crude oil and construction grade milled lumber for refined oil products, and change a few names, and the same story works for pine. I suspect it's the same for wheat framing and any market sector large enough that 1% cost reduction buys a yacht, or two.
I love Canadian pine, and I love that we can get such high quality here in the USA. When I've lived in Canada, always small towns, we were told that our market was so small they didn't need it at all, hint hint, so we should be delighted to get the rejects. Yeah, and we should be grateful that Tim Horton's blessed us with ONE store.