Tuesday, September 24, 2019

The Shrewd King 10.2: Ibbiddy-ibbiddy-ibbiddy-oo

“For sale is Lot-Number-One. There is a reserve on this lot. If the reserve is not met, none of the other lots of corn will be sold.”

“Lot-Number-One is fifteen bushels of prime, clean, last-years, Michigan corn. Who will give me 100 silver dollars?”

“Ibbidy, ibbidy, ibbiddy dee” Farmer Ken singsonged in traditional auctioneer fashion.

He paused and looked around the room.

“Who will give fifty? Ibbiddy-ibbiddy-ibbiddy-oo”

“Do I hear twenty? Ibbiddy-dee”

“Ten? Ibbiddy-ibbiddy-ibbiddy-oo”

The fat man hollered “I will give you five.”

“I have five. Now do I hear ten, do I hear ten, I am looking for ten Ibbiddy-ibbiddy-ibbiddy-dee”

I have five, do I hear seven? Ibbiddy-ibbiddy-ibbiddy-oo”

Benicio raised his card.

“I have seven, I have a seven, do I have a ten? Ibbiddy-ibbiddy-ibbiddy-dee”

“Eight.” the fat man countered. That was half of what he was currently paying and it was his limit.

“I have eight, I have eight, do I have nine? Ibbiddy-ibbiddy-ibbiddy-oo”

Slowly and painfully, the price inched up to fifteen dollars a load which was exactly what the stores had been paying. Then the price held.

“I hear fifteen, I hear fifteen, do I hear fifteen-and-a-quarter…..”

“I have fifteen once….I have fifteen twice….I have fifteen a third time...”

“Reserve not met. No corn will be sold this week.” Ken said.

Except for the hum of the fan, you could have heard a pin drop.

“What is the reserve?” the fat man demanded.

“The reserve is the minimum price the seller will accept.” Ken said.

“I know THAT.” the fat man said. “But what is the price?”

Ken really did not like the fat man.

“I could tell you what the reserve WAS but it will be higher next week. So there is no point in sharing that information.”

“On to the soybeans.” Ken said.

“How many are here to bid on soybeans?” Ken asked.

Only Kelly raised his hand.

“Can’t have an auction with only one buyer, so I will tell you the reserve and we will transact at that price.”

Kelly nodded. That seemed fair to him.

“Why don’t you step into Kate’s office and we will take care of business.” Ken said. Ken suspected that Kelly was not going to be happy with the price and he wanted a modicum of privacy.

Then Ken said to the others, “After Kelly, I will see anybody who wants to bid next week to make arrangements for credit.”

Ken asked Kelly to shut the flimsy door behind him.

Ken told Kelly what the reserve price on the soybeans was.

The blast of anger from behind the door nearly knocked the others in the auction room off their seats, it was so unexpected.

“What the FUCK do you mean, I can buy soybeans for $25 a bushel!!! I was paying $3 a bushel yesterday.”

Ken’s voice, low and calm filtered through the crack at the bottom of the door, too quiet to make out the words.

“FUCK NO! I can’t afford that.” Kelly’s voice burst out.

More low rumbling from Ken.

“You are fucking killing me. My customers can’t afford those prices and I can’t eat the loss.” Kelly said.

Inside the office, Ken said “I know that. And we wouldn't have been able to put in a crop this year without your and Milo's help. We are might appreciative for all you have done.”

And that is when Kelly came unglued.

Kelly was running on fumes. Stevie Wonder could have seen it, had he taken time to look.

Ken saw it coming. Don saw it. Earl saw it. That is why Ken wanted to do business in the office, to give Kelly at least a shred of privacy and dignity.

What the farmer’s couldn’t know...but they suspected...was that Kelly was eating poorly and sleeping worse. They also suspected that Kelly and Di had not been intimate in months.

Farming is a high stress profession. They had all been there. They could see the signs. It was like looking in the mirror.

Kelly raged on for five minutes. Every time he started to slow down and Ken tried to say something, Kelly lit back up. It was a short loop and he repeated himself several times. But there was nothing that Kelly said that was untrue.

The crowd in the auction room were riveted by the drama. Mr Ed turned off his smartphone. It would be rude to record a man who so completely lost control.

Finally, Kelly wound down, more from his voice hurting than for lack of something to say.

“Like I was saying” Ken said as if Kelly had not been screaming at him for five minutes, “we are awful appreciative of what you have done.”

“We kept track of the field-work and log hauling you done.” Ken said. “We kept track and credited you with it.”

“Whaddya mean, ‘credited me with it’?” Kelly asked.

“Credited you and Milo.” Ken said.

“We know to the gallon how much diesel it takes to work our fields.” Ken said. “We worked it backwards to the number of man-years and we credited you with that.”

In fact, both Ken and Earl had done the math separately and then had Phil Wilder check the math. They figured that a gallon of diesel equaled 13 horse-power-hours which was the same as 130 man-hours or about twenty man-days  per gallon of diesel given the fact that most men couldn't put in a full day of physical work. When there was a range of estimates, they gave Kelly the benefit of the doubt to account for the wear-and-tear on his equipment.

Ken took the piece of paper that was on the desk in front of him. He spun it around and pushed it across the table to Kelly.

Kelly picked it up. “What is this?”

“It is a receipt acknowledging the balance we owe you.” Ken said.

Kelly sat down. The number was large, eye-poppingly large...almost fifty man-years of labor.

“You might want to think about using some of that money to hire some helpers.” Ken said. “We cannot afford to have you work yourself to death and I think there will be a lot of men looking for work in a week or two.”



  1. I don't understand what is going on here. It was probably explained in a previous chapter, and maybe I missed it.

    First, why are they auctioning the corn? Why not continue to sell it at wholesale to the four stores, and the stores' customers can buy it or trade for it in the quantities they need? And why is their reserve price higher than what the stores have been paying?

    As for the soybeans, why are they trying to make Kelly pay over eight times more than what they have been charging him up until now? Especially since he is the one who helped them get their crop planted and harvested? Doesn't seem very neighborly.

    Also, don't they recognize the possibility that the very people that sent hundreds of fighters to kill them all and take their stuff might buy up a lot of their corn? They should be seeking to starve their enemies, not feed them.

    And finally, is the fat guy Blastic?

    1. The fat guy is Blastic.

      Soybeans sell at a premium to corn for a couple of reasons. They have far more protein and far more fat and there are far fewer bushels of them in storage. The price Ken quoted was a multiple of the corn's reserve price.

      The auction is a transition from the benevolent socialism that Kate instituted toward something more like a free market.

      Kate is a very nice person, ergo, she was all about easing the way for her hundreds of customers. Two things happened: her Customers had little incentive to work and her suppliers had little incentive to produce. That was masked by the inventory carried over from pre-Ebola, pre-oil crash production.

      Regarding sales to enemies. Kate was already selling in gross quantities at prices far below the true price of production to Blastic and Benicio.

      The farmers "made it right" with Kelly by crediting him with the work he had already done for them to put in the current years crop, so they weren't totally pissing in his Cheerios.

  2. Now it all makes sense. Thanks for the explanation, Joe. I am really enjoying the Shrewd King series.

  3. If I follow your estimates, 50 man-years ends up being "only" 912 gallons of diesel, or about $2737 at $3/gallon.
    So not exactly eye-popping, unless the calculation was done using the cost of labor, in which case the amount would be more like $131,400 using $15/hour as the current metric.
    Okay, I guess THAT would be eye-poppingly larger!

  4. Either way, it just goes to show how important industrialization is to feeding everyone!
    That's actually a very scary thought considering the direction our country is heading...

  5. You mentioned yesterday that Blastic had to buy corn because his horses wouldn't eat his hay; does this auction take place before his barn burned down and took his bad hay with it?
    If no one buys the corn, the farmer's will have trouble too - I would expect them to work with Kelly, Kate, and maybe others in a similar way that they do here with the soybeans.

    I too am surprised that they allow anybody who wants to to bid - why would they supply potential enemies with food?

    1. Pricing goods is a basic exercise in Econ 101/102. Price it too high and nobody buys. Price it too low and you lose money on every unit and sell boatloads of them.

      Stay tuned. The auction and first round of fall-out is the main topic all this week.

  6. Nicely done, and yes, shifting from survival to free market IS going to change things.

  7. While their prices, as quoted in 10.1, may be more in line with the cost of production, they've handled this about as piss-poorly as possible. In the real world, price changes of this magnitude always lead to social instability and even revolution. Not a situation you'd want to encourage when your survival is at stake and you're surrounded by enemies (with some on the inside as well).

    They'd have been a lot smarter to ease into this. They've staked out their territory--I'm going to be interested in how they defend it.

    1. I don't want this to be a spoiler, but the farmers are under-the-gun for time for certain tasks. Massive windows of opportunity will expire if they drag their feet.

      Another issue with incremental change is the boiling frog analogy. They need a BIG change of behaviors yesterday or there will be no crop in the fall. Game over.


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