Supply and Demand in Agriculture.pptx

SUPPLY AND DEMAND UNDERSTANDING THE DYNAMICS OF AGRICULTURAL MARKETS Mildred D. Pascua, R.Agr. Instructor SUPPLY is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. can relate to the amount av...

SUPPLY AND DEMAND UNDERSTANDING THE DYNAMICS OF AGRICULTURAL MARKETS Mildred D. Pascua, R.Agr. Instructor SUPPLY is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph. is the basic economic concept that describes the total amount of a specific good provided to the market for consumption. Most used to refer to goods, services, or labor. DEMAND is an economic concept that relates to a consumer's desire to purchase goods and services and willingness to pay a specific price for them. Market demand is the total quantity demanded by all consumers in a market for a given good. IMPORTANCE IN AGRICULTURE Key role in determining prices and quantities of agricultural products Impact on farmers, consumers, and the economy THE BASICS OF SUPPLY AND DEMAND Supply: Definition: Quantity of a product that producers are willing to sell at different prices Law of Supply: As price increases, supply increases THE BASICS OF SUPPLY AND DEMAND Demand: Definition: Quantity of a product that consumers are willing to buy at different prices Law of Demand: As price decreases, demand increases SUPPLY AND DEMAND CURVES Equilibrium Point - where supply is equal to demand. FACTORS AFFECTING SUPPLY IN AGRICULTURE Production Costs: Input prices (seeds, labor, machinery) Technological advancements Weather and Climate Conditions: Impact of droughts, floods, and seasonal variations Government Policies: Subsidies, tariffs, and regulations FACTORS AFFECTING DEMAND IN AGRICULTURE Consumer Preferences: Trends in dietary choices and health consciousness Income Levels: How changes in income affect purchasing power Prices of Related Goods: Substitutes and complements (e.g., beef vs. chicken) AGRICULTURAL MARKET EQUILIBRIUM Price Determination: How market forces balance supply and demand Shortage and Surplus: Effects on prices and market adjustments CASE STUDY: CORN MARKET Historical Price Trends: Impact of supply shocks (e.g., droughts) and demand shifts (e.g., biofuels) Current Issues: Trade policies, technology, and global market influences IMPACTS ON FARMERS Revenue and Profitability: How fluctuations in supply and demand affect farm income Risk Management: Strategies for coping with price volatility (e.g., futures contracts) CONSUMER IMPACT Price Volatility: Effects on food prices and consumer behavior Access and Affordability: How market changes impact food availability FUTURE TRENDS AND CHALLENGES Climate Change: Potential impacts on supply and demand Technological Advances: Innovations in farming and their effects on the market Globalization: How international trade affects local agricultural markets