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Wow. What a deep and well-thought out post by Godric Mortimer. I'm amazed on how well formulated his ideas are and how relevant his discussion of the article was.*

*Warning: May contains subtle sarcasm.

I remember buing bread for 0.40... now you're telling me 0.8 is too cheap...
back to the point, you actually answered the issue already, some food companies go bust, the supply of food go down, prices go up, done.
If perchance some new grain companies are set up or the existing ones grow, the supply of grain go up, prices go down, food companies profit go up while grain companies profit go down, balance restored.

At the current exchange rate of around 0.02 then food wages and Grain wages are similar in terms of producing an end product that remains competitive against world prices.

If we drop our rate down towards 0.015 (as was planned) then grain wages will outstrip food wages (based off current world prices) and in order to keep wage parity then your food will be a little bit more exspensive.

The prices of bread were at 0.40 because the NZD was worth much more back then. It has since been devalued and thusly, everything costs more of the NZD.

Bust of numerous food companies would solve the issue, but how many eNZ jobs would be lost? I would assume that at least 5 companies would need to go under and each company has an average of 7 workers. That's 35 workers that just lost their job. While there are probably jobs that would be open for them, if it is in the food or grain sector; this will only repeat itself naturally. If the 35 workers join the grain sector, grain will become to plentiful and revenue will drop in the grain sector. If the 35 workers stay in the food sector, food will stay plentiful and nothing will change.

I will agree that the best chance of survival of the numerous food companies would be to hope that more grain companies expand or are created. It is significantly more likely than the grain company owners' deciding to lower prices as a bloc in order to avoid the short bust in food.

Regardless, thanks for an on-topic comment.

isn't working

At 0.015 then Grain will trade around 0.12NZD and Q1 food at 1.44NZD with wages from x6 to x4 your skill level as you skill up.

Worst case is that grain companies will gouge out the import tax rate and you'll be looking at 0.15NZD Grain and 1.8NZD Q1 food.

Alfa -

Thanks for the information on that. I was unaware of that plan. I do know that our food is competitive throughout the world, but I am a firm believer of eNZ food for eNZ. If eNZ companies would earn more elsewhere, why would they stay here? They would sell their goods elsewhere and eNZ food prices would rise due to a lack of supply.

As for the 0.015 plan, I'm quite partial to that idea. The price of food and grain are comparable well and you should earn (No more greedy company owners...) more than enough to pay for your daily food and more.

Thanks for letting me know Chetan Zapato. I guess I didn't catch that earlier.

Well the 0.015 idea might not be so good if admin goes through with their economic plan.

I prefer keeping it at 0.02 so that we still retain the option of going down the manufacturing export route rather then the grain export route.

How exactly does keeping the exchange rate pegged at 0.02 allow us to retain the option of going down the manufacturing export route?

"At 0.015 then Grain will trade around 0.12NZD and Q1 food at 1.44NZD"

So our grain will be near the cheapest in the world (if we don't gouge due to the 25% import rate) but our food will be nowhere near profitable to export at that price.

Keeping it at the current level (0.08Grain & 0.95food) means our Grain is still cheap but so is our food.

From an eSK discussion -

Skill 7 Grain worker with 80 health produces 311 grain which if sold for 0.12KRW (amongst the cheapest in the world) makes 37.3KRW (so they can earn 37.3KRW in wages)

To get a Skill 7 Q1 food worker with 80 health then you must be prepared to pay them the same as a grain worker (37.3KRW) he/she will then produce 52 units of food.

The company then has to sell that food to cover the wage (37.3KRW) and the Raw material cost (37.3KRW) so the breakeven on that is 1.44KRW

Ah. That makes sense. In that case, keeping the peg at 0.02 will probably be safest for now. However, the current level is still swayed currently as food prices are about 0.10 NZD lower than the 0.95 that they are supposed to be at.

That's the exchange rate fluctuating over the last few days. The Reserve bank of eNew Zealand has been driving it down and buyers have been pushing it up.

Plus you have profit margins, wage demands and taxation to throw into the mix.

Profit Margins and Wage Demands would affect the high price of grain, but food is the most heavily affected by the VAT and the other factors. Once more, is the lowering of food prices solely due to an oversupplied market or is there another factor that is lowering the prices?

When Grain prices rise, the food prices should've rose as well. Instead, they sank.

Grain has been moving between 0.07 and 0.08 and food has been up and down.....our markets haven't settled yet since our nation was born

As of last week, grain was solidly 0.07 and occasionally 0.06. I just don't really see how it could change to solid 0.08 and the rare 0.07.

Our markets may not be settled but that is a pretty large change when looking at total revenue.

no grain at the market atm...

Newsflash: The raw types and the productivity bonus just changed...
I'll wait and see the results but I expect major grain shortage. A quick example: A lvl6 worker with 100 wellness yesterday produced 317 units and now only 194 units. And yes, we still need 6 grain (or cattle or whatever) for a food unit...

...and of course the grain price will go up (even without the lack of grain) if we want to keep the grain worker salary competitive to that of the food worker. As a consequence the price of food would climb as well etc.

RM formulaes are now as if we had medium regions (roughly 1/2's production) then you add in the 25% bonus so your figures seem in the ball park.

eNZ needs more workers!

Grain production has been slashed to 62.5% of previous so a new grain price of 0.015 upwards can be expected till things level out

I dont care about this stuff... As long as i keep making 22$ a day im happy.

Grai nproduction has been adjusted - companies in eNZ should now be producing +25% over what they previously were.