Big Grain. Where’s the Outrage?
We tend to be outraged when we hear reports of record profits earned by oil companies. How can they be making so much money and still have the nerve to raise gas prices to near $4 per gallon? The outrage stems mostly from the media and politicians, who typically only give one side of the story, leaving people with a skewed perception of reality. They rarely report the profit margin which is a better gauge of the profitability of a company.
In order to sustain any company, a portion of the profits must be invested back into the company and used to cover the cost of production. In the case of Shell, they use much of their profit for oil exploration, general maintenance, marketing, taxes, developing cleaner, more efficient blends, etc. If you look at the profit margins of Shell you’ll notice that they are near the average for companies of that size.
As Glenn Beck points out in the following video, the profits of grain companies have gone through the roof despite rising prices, and food shortages throughout the world (mainly due to government meddling and the biofuels boondoggle). Why aren’t people expressing their outrage with grain companies?