Hawaiian cattle fly on Boeing 747's

[archerships]

http://betterhawaiibureau.blogspot.com/2006/06/to-fix-economy.html

"In Hawaii, for example, shipping prices are so expensive because of the Jones Act, that Hawaii cattle ranchers find it less expensive to send their cattle to the mainland via Boeing 747s. As Congressman Nick Smith wrote in May, "It doesn't have to be this way. There are 164 cattle carriers floating around the world's oceans that would love to be of service to the Hawaiian cattlemen but are barred from serving them because of the Jones Act."

That same month, the president of the 110-member Hawaiian Cattlemen's Council Inc. noted that "as much as 60 percent in costs could be saved utilizing competitive livestock carriers transporting whole herds at one time. The Jones Act costs consumers and small businesses in Hawaii approximately a billion dollars per year.""


A couple of things that surprised me here:

* Who knew that Hawaii had cattle ranchers? I wonder if they exist due to some other subsidy.

* That traditional shipping is so expensive that it is more cost-effective to fly their cattle via Boeing 747's!!! How is that at all economical?!? Is there something special about Hawaiian beef?

What didn't surprise me:

* That the cost of shipping was so high due to protectionist legislation (the Jones Act) that prevented non-U.S. carriers from shipping between two U.S. ports.

Comments

[ernunnos.livejournal.com]

There's a billion dollars worth of arbitrage and not a single U.S. carrier willing to take advantage? There's more to this story.

[crasch.livejournal.com]

Assume for the moment that Ford had a plant in Phoenix, and somehow managed to persuade town councilman to pass a law mandating that Phoenix citizens could only buy cars manufactured in Phoenix. What do you think that would do to the price of cars in Phoenix? What kind of economic impact do you think that would have on Phoenix?

[ernunnos.livejournal.com]

I expect that people would move out of Phoenix. And if for some reason that didn't happen, that other manufacturers would move branch plants into Phoenix to capture that market.

Look, gun and auto manufacturers have quickly complied with the unique requirements of individual states. A billion dollars is a lot of money, and the first company to enter that market can charge just below 747 rates for cattle cartage. And yet nobody is interested?

I'm not saying there aren't distorting factors, but that act alone doesn't begin to explain the situation.

[crasch.livejournal.com]

I expect that people would move out of Phoenix. And if for some reason that didn't happen, that other manufacturers would move branch plants into Phoenix to capture that market.

And how long would that take? What would the cost to the economy be in the meantime?

The billion dollar figure is the overall estimated cost of the Jones act to Hawaii, not just costs associated with the cattle industry.

[ernunnos.livejournal.com]

"The Jones Act is the common name for Section 27 of the Merchant Marine Act of 1920, a federal law."

I expect it would take somewhat less than 86 years.

[idoru.livejournal.com]

The cattle herds I saw on Maui were bred to have short legs. I forget why.

[crasch.livejournal.com]

Interesting. I wonder why.

[notangian.livejournal.com]

Maui has no predators (or snakes for that matter). On the mainland, fences are designed to keep them out more than keep the hoofed animals in. Shorter cows mean short fences, which are easer to maintain, and cost less...but I think more importantly...Maui is ALL hill, and lots of pot holes. Since it is on the side of two peaks. Shorter legs ensure less broken legs. Even one cow going down is very expensive...

[arpad.livejournal.com]

Perhaps large number of flights to Hawaii brings cost of flying cargo down as well.

[crasch.livejournal.com]

Good point.