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Choose an agricultural commodity. Explain how four of the seven factors that affect demand could affect the commodity you selected.
Chapter 5 Discussion
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Leslie Bradley posted Sep 9, 2020 9:40 PM
Commodity: Wheat
Wheat is one of the biggest crops consumed in the world. It is used to make cereals, bread, pastries, desserts, etc.
Price of the Product (own price)- the price of wheat could dramatically effect its sales. If the price of wheat went up then that means that all of the products I listed below would go up. People could opt to buy substitute products to avoid the high cost. For example: they could have eggs for breakfast instead of muffins.
Price of compliment goods: Wheat is processed into many things through baking and milling. In a lot of ways compliment products are used to help refine it into what we find in the grocery store. Price of compliment goods going up could affect the sales of wheat. For example: if the price of milk went up, the sales of wheat based products could go down. Milk is used with cereal, baking, breads, and all other products I listed at the top.
Income: For low income families, if wheat prices were to go up then they might look at other substitutes for their homes consumption.
Taste and Preference: If people were to like soy flour or soy based products better for their taste and health benefits, wheat could become a less desirable product.
Chapter 5 Discussion
Contains unread posts
Mackenley Snowden posted Sep 10, 2020 5:54 PM
Commodity: Corn
Corn is a product that is a main ingredient in a lot of our food every day. A recent study from the Corn Refiners Association states that corn is almost used in four thousand food products. It also can be used to feed livestock and other animals in nature.
Seasonality: While corn may be used in a lot of our food products it is also used a lot in feeding animals. A good friend of mine’s family owns a feed store where they sell straight corn or a fifty-fifty corn gluten mix feed for cows. In the summertime, they sell more of the fifty-fifty because farmers aren’t feeding hay, so their feed a good supplement for weight gain. They also have a demand increase for stores in North Carolina when deer season comes around. Hunters will put out corn to bait deer into their hunting spots.
Taste and Preference: While farmers harvest their corn and take it to a sale spot, some farmers may save a few acres and sell it by the ear. While most people may just buy their corn from the grocery store the demand for a fresh ear of corn can increase around harvest season. Also, like previously stated hunters use corn for baiting their deer. Hunters can be picky about what corn they put in their feeders, dirty corn has a tendency to stop up automatic feeders.
Price of the Product (Own Price): The price of corn can vary highly on how well the production of corn went that year. A drought in the mid-west will make the yields lower. With lower supply, the price will be higher to make up for what yield was loss.
Income: Especially in times like these with COVID a lot of jobs had to lay off or fire workers. While corn may not be a large expense it can still be an easy expense to cut out if you’re budgeting. If you were laid off or you may still be laid off then putting out corn for deer or other animals may not be where you decide to spend your money. This can affect the demand for corn.
