FOOD WINE AND CULTURE
OF CARLIFONIA
Demand is the quantity
of a commodity or service which the consumers are willing to buy at a
particular time in a given time. Supply on the other hand, refers to the
specific quantity of a particular product or service available in the market at
either a specific price or range of prices.
There are many factors
that have been influencing the supply and demand for food in the recent years.
This paper will describe and evaluate some of these factors and the main
reasons behind those factors. The paper will first seek to explain the factors
affecting the demand for food and then go a notch higher to describe the
factors that determine the supply of food over the recent years.
First and foremost, Food prices to a higher degree affect
the availability of food to the consumers. Although sometimes the demand of a
food commodity may be independent of its price; more often than not higher food
prices results in a declining demand and vice versa. This can be attributed to
natural consumer behavior, a natural phenomenon in which consumers do not wish
to spend more for less. The cost of living does not provide enough room for
extravagance but conservative spending.
Competing
goods also known as supplementary goods can increase or
decrease the demand of a certain product. The existence of many supplementary
goods will lower the demand of a food item. It provides the consumer with an
alternative which could have a cheaper or more reasonable price. Subsequently, the prices of the competing goods too
will create a shift in the demand for a food item. With low prices of the
competing good, consumers will opt to go for the competing good if it can
satisfy the consumer and suits his/her need.
Changes
in price; some food commodities do not have a price elasticity
of demand. Smaller price changes do not reflect on the demand of the object.
Yet some food items like sugar and meat quickly adjusts in demand as a result
of price changes. Sudden increase in price change will lead to a reduction in
demand as consumers seek other options. Reduction in price on an opposite hand
would create a sudden forward jack in demand.
When consumers are
expecting a future change price, demand
will get altered. If the price change expected is a higher price, traders
might decide to hoard the good while consumers might buy in bulk to forego the
future price hike. The converse is that if prices are expected to fall,
consumers can choose to wait till the prices fall.
The
range of product can cause the demand to be low if the
product range is high. The consumers spoilt of choice and this will lower the demand. A low product
will increase the demand since it limits the products.
Tastes
and preferences of consumers: consumers have
variations when it comes to tastes and preference. This divergence could be due
to the inherent fact, all people are different. Different consumers have
different choices in a world of many foods serving a common purpose. In certain
geographical or ecological zones
certain foods are preferred as staples .This causes such foods to have a
perpetual high demand.
Population,
which
also refers to the number of
consumers in a given market segment determines demand for food produce with a
positive correlation. The number of consumers is directly proportional to the
demand of that produce if other factors are held constant. The converse is true
in that where there are few consumers; correspondingly there is a reduced
demand.
Consumer
income: the greater the consumer income the greater should
be the demand minus other factors. It is the money in the hands of consumers
that give them the purchasing power. Consequently, where the per-capita incomes
are low demand declines. Conversely if the consumers have higher incomes then their
purchasing power increases thus they buy more to satisfy their needs.
(b) SUPPLY
The supply of a food
commodity first, depends on the Prevailing
Prices. Higher prices leads to higher production since the producers are
interested in increasing their production to the maximum. Lower prices can
discourage producers if they culminate in losses or very low profits.
Cost
of inputs is a major determinant of supply. When the cost of
production is high the supply lessens. A high cost of inputs cuts on the profits
and farmers or food manufacturers might hope to reduce the supply to contain
the cost of inputs and outputs.
Technology
and or innovation affect the supply of food by influencing
the method of production. Technology can lead to a higher efficiency in
production and hence increasing supply. It can also minimize the cost of
production and hence increase supply, since the intention of the supplier is to
increase supply to the maximum level.
Climatic
factors and other natural factors like weather hazards such
as hailstones can destroy outdoor farm produce and hence reduce or completely
extinguish supply. Global warming and ozone layer depletion resulting to
extreme atmospheric temperatures has greatly impacted agriculture. Inadequate
rainfall, soil fertility, humidity and other weather components influences crop
diseases that greatly reduce yield thus reducing the ultimate food supply. On
the other front, favorable climatic conditions lead to increase in supply,
because of the positive effect on yield. Greenhouse and microenvironment
management has also increased food production, thereby boosting supply.
Possibility
of storage: with storage facilities food produce can be stored
for future supply to carter for the sudden shortfalls. The possibility storage can
lead to surplus in the market. Where there is no storage, supply can be
seasonal.
Transport
and communication provide the necessary means by which
the supply can get to the market. Lack of access or means of transport can lead
to a reduced supply, when the product cannot get to the market in time or at
all.
Last but not least, is Government policies? Statutory
procedures set by the government can either increase or cause a shortfall in
supply. The statutory requirements, regulation and compliance can eat on the
profitability of food production hence reduce supply. When there are few legal
bottlenecks supply may increase due to profitability of the food production
ventures.
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