Essay on Causes of Seasonality of Food and Beverage Product Stores

Introduction

Seasonality can be defined as movements seen in time series that repeat throughout the year, at specific time points each year, with similar potency in the same season. According to Jayaramu (1), it is systematic, although not certainly regular, intra-year movement attributable to the changes of the calendar, the weather, and timing of decisions, indirectly or directly through the production and consumption decisions made by the agent of the economy. From these definitions, it means that seasonal movements are presumed to be foreseeable. Mainly, under normal conditions they can be anticipated to recur, but, they can slowly change over time as elements than inducing seasonality are unstable in time. In this context, seasonality of food and beverage products refers to the periods of the year when the harvest of a particular type of food or beverage crop is at its peak.

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Cause of Seasonality of Food and Beverage Products

The root cause of the seasonality of food and beverage store products is the usual differences in atmospheric conditions between seasons. Such differences mainly include variation in temperature, humidity, high or low rainfall or snowfall, and variation in the sunshine. These weather events combine to form seasonal climate conditions, which have an enormous effect on agriculture. According to Jayaramu (4), various studies have investigated historical trends and fluctuations of temperatures and precipitation in the four climate seasons namely spring, summer, fall, and winter. The weather conditions for each season favor particular crops, which translates to the availability of foods and beverage products produced from such crops during that particular season. For example, some vegetable such as Brussels and kales thrive in winter, Rhubarb and strawberry thrive in spring, while in summer, corn, and cucumber can be easily available. Consequently, in any given season, stores sell only foods and beverages that can grow during that season, thus, the seasonality of the products in the stores. According to Tierney Jr, Waller, & Amosson (1), most of the principal field crops grown in the United States have a single harvest season.

Effect of Seasonality of Food and Beverage Products on Producers

Seasonality of food and beverage products in stores affects producers adversely, particularly, in relation to crop prices. Price trends are the results of gradual one-directional changes in supply and demand that happens over a certain period. These trends can have a significant influence on market prices and can remarkably change seasonal price patterns (Tierney Jr, et al., 2). Seasonality causes crop prices namely cash, futures, basis option volatility, Intermarket, intramarket, and inter-commodity spreads to behave in a comparatively foreseeable manner. There are two main elements to crop seasonality namely the harvest lows and the post-harvest rally.

During the harvest lows, there is a sudden increase in the supply of the crops for a relatively short period of time. The forces of supply and demand dictate that an increase in supply leads to a decrease in prices. Thus, producers are forced to sell their products at poor prices. Farmers may lose money in their commodity options or futures accounts, but the ultimate profitability of the seasonal crops depends on the net profit of the crops produced net any options or futures gains or losses (Tierney Jr, et al., 3). Therefore, it follows that a producer should be more interested in selling a crop at a profitable price than selling it at the seasonal high.

Work Cited

Jayaramu, Niranjan. Impact of Seasonality on Agricultural Commodity Price Behavior: A Thesis Presented to the Department of Agricultural Sciences in Candidacy for the Degree of Master of Science. Diss. Northwest Missouri State University, 2015.

Tierney Jr, William I., Mark L. Waller, and Stephen H. Amosson. "Seasonality and Its Effects on Crop Markets." Texas FARMER Collection (1999).