Source: http://modernfarmer.com/2013/04/meet-the-modern-farmers/ Permission: This material has been reproduced in accordance with the University of Saskatchewan interpretation of Sec.30.04 of the Copyright Act.
Note: This module extends over a two week period as compared to a standard one-week module
Overview
Many of you come from agricultural backgrounds where your families have been growing crops for food and feed, or animals such as hogs, cattle and poultry. And it doesn’t matter where you grew up you are certainly a consumer of food. All the products on the market are produced using a variety of inputs and technologies. All products are sold at a positive price that quite often fluctuates. Did you ever wonder why the price of cauliflower in the spring of 2016 was about $8/head? Or why the prices of organic food are higher than for non-organic? The forces of supply and demand are at work, or in plain English, how producers make stuff to sell and how much consumers want to buy.
We have already talked about production and how it relates to business. In this module, we will explore how production from individuals can be added together to form the market supply. We will also introduce the other side of the market – the consumer – and how the consumer can influence prices.
Even if you’re not an agricultural producer, you will be able to determine what factors are affecting the price and availability of the foods you buy, and what might happen to prices and availability in the future.
Learning Objectives
Upon completion of this module, you will be able to:
- Construct market demand from individual demand
- Construct market supply from individual supply
- Identify the forces that constitute a market equilibrium
- Differentiate between exogenous and endogenous changes that affect the market
Module Instructions
For this module you are required to:
- Read Chapter 3 of the textbook
- Read this module
- Read news article links as you come to them in the module
- Post a news article (of your choosing) pertaining to changes in agricultural markets and explain the market mechanisms
Required Readings
Druyan, A. 2016. The effects of solar power growth on metals demand. Modern Trader. April 6, 2016. Retrieved from: http://www.resourceinvestor.com/2016/04/06/effect-solar-power-growth-metals-demand
Erickson, D. 2015. Peaches in paradise: hot weather produces bumper crop at Forbidden Fruit Orchard. The Montana Standard. August 2, 2015. Retrieved from: http://mtstandard.com/news/local/peaches-in-paradise-hot-weather-produces-bumper-crop-at-forbidden/article_fe9ab02a-c764-5397-9fb8-2b0c30ee10e8.html
Kuo, Y., 2016. 3 great forces changing China's consumer market. World Economic Forum, Monday 4, January 2016. Retrieved from: https://www.weforum.org/agenda/2016/01/3-great-forces-changing-chinas-consumer-market/
Taylor, Tim, and Greenlaw, Steven, 2014. Chapter 3: Demand and Supply. In Principles of Economics. OpenStax College, Rice University. Available online: http://open.bccampus.ca/find-open-textbooks/?uuid=d7fed8c0-e900-4bef-b414-14f48122cba2&contributor=&keyword=&subject=Economics
Woodburn, J. 2016. Rain wipes out NSW crops in third wettest winter on record. ABC News. September 2, 2016. Retrieved from: http://www.abc.net.au/news/2016-09-02/rain-wipes-out-nsw-crops-in-third-wettest-winter-on-record/7810722
Worland, J. 2016. How drought and extreme heat are killing the world's crops. Time. January 6, 2016. Retrieved from: http://time.com/4170029/crop-production-extreme-heat-climate-change/
Key Terms and Concepts
- Complements
- Demand
- Demand curve
- Efficient (re: market equilibrium)
- Endogenous factors
- Equilibrium
- Exogenous factors
- Income
- Individual demand
- Individual supply
- Market demand
- Population
- Preferences
- Price
- Price takers
- Quantity demanded
- Quantity supplied
- Related goods
- Substitutes
- Supply
- Supply curve
- Theory of Demand
- Theory of supply