One of the most economical fundamental concepts is the law of supply and demand and it forms the market economy backbone (O'sullivan, 2007). The term demand annotates to the amount of a service or product that the buyers desire. The quantity demanded is the amount of the product that the buyers are willing to buy at a given price. Supply, on the other hand, is the amount of product that the market can offer.
The article by Donald Stotts talks about the issues or challenges pertaining to supply and demand in the beef industry. Analysts project that there is a continued buildup in supply pressures in beef markets as a result of the potential trade war that could lead to volatility and uncertainty in the beef markets. According to Derrell Peel who is a specialist in extension livestock marketing, there could be possible changes in the beef trade as from 2018 negatively impacting cattle and beef markets. According to Stotts (2018), the impact on the beef export market may be direct, however, the indirect effects like domestic supplies of competing products and reduced port export may be more significant. This reveals how supply affects demand and vice versa. From the course text, it is clear that when the supply is low, then the demand becomes high and this is exactly the same scenario that would be witnessed in this case when the supply of beef reduces.
Most likely, there are potential primary and secondary negative effects to a multitude of markets. According to Peel, in the second half of the year, there were massive supply and demand factors taken into consideration. Two major factors would affect the level of production of beef including the carcass weights and the rates of slaughter. At that particular time, herd liquidation seemed not to be affected by drought factors, but still, the threat existed. Another major factor that affected the female slaughter is the further slowing of herd growth and heifer retention partly as a result of the drought conditions and according to Peel, the condition would continue to the end of the year.
Basically, there are several factors affecting the supply and demand aspect in the beef industry, and among the major factors according to the article is the weight of the carcass. There is an old saying that bigger is not always better, and this is a factor that has been put into consideration by the U.S cattle industry by taking stock of the role those larger animal carcasses can play in affecting the supply and demand factor. The research found out that as the years go by, the average weight of a heifer carcass reduces by an average of 12 pounds on a yearly basis, and this is a factor that cannot be ignored at all costs (Stotts, 2017). The implication of this is that as the weight of the heifer carcass reduces, there is a tendency that more cattle would be slaughtered leading to moderation in the production of beef. This has to do with the aspect of supply and demand.
The reduction in the weights of a heifer carcass implies that for instance two years ago, to attain a total of five thousand kilograms of bee, we would require approximately one hundred heifers. The situation now is different and for example, to attain the same five thousand kilograms of bee, over one hundred and fifty heifers would be required. The meaning or implication of this, therefore, is that the reduction in the average weight of the heifers has led to an increased demand for beef and therefore increased production of the same (Stotts, 2017).
Peel stated that the drop in the weight of carcass in 2017 has a short-run effect on the supply of beef. Besides, it is also critical to note that the size of a carcass is not all about their pounds. When we talk about larger carcasses, what we mean here is that per animal, there are more pounds of meat, and at the same time bigger product sizes for steaks and muscles cut. Consumers have always reported to the industry that bigger and bigger steaks are not all they want. In other words, people are continuously viewing steaks as too expensive to purchase and too big for meals.
As seen, this article has a very close relationship to the course content. Its whole idea is comprehensively revolving around the concept of supply and demand with a breakdown of some of the elements such as consumer behavior. This is a real-life case that brings to light the theoretical concepts taught in class making a lot of sense to the students. It is also clear that apart from the supply-demand relationship, there are several other factors that affect the supply and the demand of a product and some of them may include the quality, the price among many others, and this is a concept that the article has properly taken care of (Beattie, Taylor, & Watts, 2014). All the factors taken care of, it would be appropriate to recap the article by stating that the aspect of supply and demand is one of the major economical fundamental concepts that most of the businesses and industries have their lives revolving around. Businesses must, therefore, take keen note by making good use of the concept to tap the most out of the market.
Beattie, B. R., Taylor, C. R., & Watts, M. J. (2014). The economics of production (No. 338.5 B369). New York: Wiley. http://www.krieger-publishing.com/PDF/Beattie.pdf
O'sullivan, A. (2007). Urban economics. McGraw-Hill/Irwin. https://www.pdx.edu/sites/www.pdx.edu.econ/files/EC431_531_Fruits_W2017.pdf
Stotts D. (2017). Cattle Carcass Weights Affecting Beef Supply and Demand Factors. Oklahoma State University Extension. https://www.drovers.com/article/cattle-carcass-weights-affecting-beef-supply-and-demand-factors
Stotts D. (2018). Supply and demand challenges continue for the beef industry. Oklahoma State University Extension. https://news.okstate.edu/articles/agricultural-sciences-natural-resources/2018/stotts_beef-supply-demand-challenges.html
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