Warm Up What is the job of the SEC (Security and Exchange Commission)? How do you calculate net worth? Opinion: What type of farm would you own if you could own a farm? Why? 1.Police the stock market 2. Assets- Liabilities = New worth

Learning Goal: I will learn about the farm production business. Economics Standard 12 Learning Goal: I will learn about the farm production business.

I. Inelastic Demand It is unlikely that your family will buy twice as much bread, milk, or lettuce if the prices for those products were lowered by 50% Large harvests => prices lower => lower income

Groceries

II. Inelastic Supply Once planted, production is set Farm prices often follow a boom and bust cycle Bad weather => prices are high => increase planting w/ good weather => crop surplus => prices fall!

Boom and Bust Cycles

III. Government Regulation During WWI farmers increase production to help Europe 1920s = overproduction 1930s = Great Depression (New Deal Programs) Price floors => surplus Acreage-Control Programs Import Restrictions Department of Agriculture (subsidies)

Florence Owens Thompson and her children was taken by Farm Security Administration photographer Dorothea Lange in Nipomo, California, in March of 1936

graph

Crop Surplus

IV. Farming Today Since 1929 the number of farmers has shrunk by 67%, yet output has increased by 60% Advances in technology (ex, fertilizers, pesticides…) Foreign demand increasing (ex. Japan) Corporate farms Environmental Concerns (ex. pesticide/pollution) Less political power

International Trade