Thank you for your kind words. They are honestly appreciated.
I'm not against a buyer making money on that pound..but lets say if he makes 500 on that pound..me as a digger, would think he is making to much and I should be getting part of that modest profit
Now we are getting to the real issues at hand...how much should dealers make and are they cheating or otherwise taking advantage of the diggers.
Ok, if we relate our hypothetical dealer last season to a situation in which some actual buyers found themselves, there might be a lesson to learn (there was for me anyway).
So, we buy an average pound at $300 and later (very late btw last year) we sell it at $800. For this to work, a few things have to happen. First, we have to be able to buy that average pound at $300, then we need to sit on it which means we didn't run out of buying money at those high prices and have to clean up. And, finally the price has to go up that high at the dealer level.
We are Assuming all those things happened with our hypothetical pound. Now, let me ask you this, what happened to the pounds bought after our hypothetical pound for $300? As the price began to rise, our hypothetical dealer had to pay more for digger lots of root. By the end, this dealer might be paying $780 - $800
just to stay in the game. In case you didn't know, the market cooled off late last year. So, now our dealer is $780 into a pound he only got $750 for when he sold. So, if this hypothetical dealer only bought two pounds (to make the math easy) we see he made $500 on one and lost $30 on the other. This is a net profit of $235 on average.
Still high?
Well, look around the boards here. Are more guys and gals selling at $400 -$450 or are they waiting looking and hoping for $600?? In reality, our dealer will likely buy much more for the higher prices than he will for the lower prices early in the season. So, if we be a little more realistic with our example, our dealer might by four pounds 1 at $300, 1 at $500, and 2 at $780. Now, if he sells them all at the same time (remember, he didn't clean up) for $750, we see his cost for root alone (no overhead business costs included) is $2360 and he sold it for $3000. This makes him a gross profit of $640. Average that out between the four pounds and he made a gross average profit of $160 per pound -not $500.
So, while speculating makes it easy to place the numbers pretty high, the reality is that this isn't always the case. I find myself working on a twenty dollar bill too often. I pay as much as I can for good root because I want to encourage that kind of digging and would like to raise the over all quality of the root we offer to the market.
To directly address your question, though, I would have to say as long as God grants us the grace to live free and work with a free market, what someone else makes on a pound of ginseng I dig is up to them and the market. We each are responsible for our own actions within the market. This includes digging right and caring for what we dig as much as selling right. I don't begrudge a buyer above me who makes more. I've seen an amount and quality of wild ginseng that I might pay $100 priced in traditional Chinese medicine shops for $800. They don't owe me part of their $700 (not including overhead).
We are working in a free market situation. This isn't a socialist controlled system where profit should be evenly spread out for everyone (meaning taken from whose who work hard, invest and take risk, and given to those who don't)
now as far as seng ever being worth nothing ,that just ain't going to happen,see the demand in the Asian market is ever growing, not shrinking.
I agree, it won't happen. However, the argument that it could happen is very valid and correct. Nothing is worth any more than someone is willing to pay for it at any given point in time. Remember a few years ago (07 maybe if memory serves) we had a high market one year and opened high the next only to have the Asian markets refuse to pay those prices. Most buyers got upside down in a hurry and the digger price dropped from $650 to $300. I had an order for 1000 pounds of cream and couldn't buy it the year before, and the next year, everyone wanted more than their ginseng was worth.
So, it can happen, but a zero price isn't realistic I agree. I don't think $600 digger prices this year are likely, however. I will say, I think they are more likely now than they were a week ago, but there is still some information that makes me think this thing is going to drop some. I know some buyers are pushing up the prices, but that tune will change if China doesn't come into the market soon.
