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20 Cards in this Set
- Front
- Back
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What is price determination?
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price is equilibrium between supply and demand for an item.
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Is price consistant across different markets?
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yes, after basis is counted.
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What is basis?
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difference between futures contract price and local cash price
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Il exports more grain, why?
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due to lack of livestock and we have the means of transportation.
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What are some trends since WW2?
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yields have trippled, more on farm storage, more direct sales to processor terminals, use of semis, GMO's, rise of specialty grain
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What is supply?
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amount of product available for purchase at given price.
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What is demand?
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amount of product that consumer will purchase at given price
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What is price elasticity?
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degree that price will change as supply or demand changes
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What are some factors affecting supply?
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amount of production, weather, production costs.
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What are some factors affecting demand?
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number of consumers, income level change, preferences, prices of substitute, consumer expectations.
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If prices drop what could happen?
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demand can increase overtime.
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If prices rise what could happen?
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supply will increase overtime.
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What is price discovery?
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the opinion of buyers and sellers on what a product is worth
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What is a futures markets?
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public exchanges
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What is a cash market?
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private and local exchanges.
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What are some major changes since WW2?
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growth of feedlots, confinement production, vertical integration, decentralization, fewer packers buying livestock
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What is vertical integration?
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processor owns animal, birth to grocery.
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What are some future trends?
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larger farms, better transportation, production moving away from urban areas.
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What is the purpose of livestock grading?
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designed to improve uniformity value
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Why does the government set minimum milk price levels?
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It's essential for children.
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