THE DOMESTIC MARKET

US POPULATION

FACTORS THAT INFLUENCE DOMESTIC DEMAND A LOOK AT LIVESTOCK PRODUCTS

Shifts in Consumption for Meat

WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES

WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES – HEALTH (LOW FAT POULTRY)

WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES – HEALTH (LOW FAT POULTRY) DEMOGRAPHICS

WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES – HEALTH (LOW FAT POULTRY) DEMOGRAPHICS – AGE

WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES – HEALTH (LOW FAT POULTRY) DEMOGRAPHICS – AGE – RACE AND ETHNIC BACKGROUND

“However, dietary choices of people of various ethnic groups living in the United States continue to be influenced by the traditional food practices and/or religious customs. For example, many Asian Americans still eat a diet similar to traditional Asian diets, which include large amounts of rice accompanied by vegetables, soy products, fish and meat. Many Hispanic Americans continue to eat a diet based primarily on beans, rice, and corn tortillas, seasoned with chili peppers and accompanied by beef, pork and chicken and small amounts of dairy products.”

WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES – HEALTH (LOW FAT POULTRY) DEMOGRAPHICS – AGE – RACE AND ETHNIC BACKGROUND – CHANGE IN HOUSEHOLD STRUCTURE

WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES – HEALTH (LOW FAT POULTRY) DEMOGRAPHICS – AGE – RACE AND ETHNIC BACKGROUND – CHANGE IN HOUSEHOLD STRUCTURE – INCOME SHIFTS

WHAT HAS IMPACTED U.S. MEAT CONSUMPTION CONSUMER TASTES AND PREFERENCES – HEALTH (LOW FAT POULTRY) DEMOGRAPHICS – AGE – RACE AND ETHNIC BACKGROUND – CHANGE IN HOUSEHOLD STRUCTURE – INCOME SHIFTS – NEED FOR CONVENIENCE

The Demand for a Product the Law of Demand as prices go up -- quantity demanded goes down (all other things remaining unchanged)

Demand Schedule Price Quantity $ $ $ $

Demand Curve price quantity a b

Why downward sloping? Physical Satiation Substitution effect Income effect

ELASTICITY OF DEMAND THE RESPONSIVENESS CONSUMERS ARE TO A CHANGE IN PRICE

ELASTICITY OF DEMAND % CHANGE IN QUANTITY DEMANDED / % CHANGE IN PRICE

ELASTICITY OF DEMAND IN THE CASE OF THE PRICE ELASTICITY OF DEMAND THIS IS A NEGATIVE NUMBER

ELASTICITY OF DEMAND ELASTIC VS INELASTIC

ELASTICITY OF DEMAND PRICE QUANTITY DEMAND VERY INELASTIC

ELASTICITY OF DEMAND PRICE QUANTITY DEMAND ELASTIC

ELASTICITY OF DEMAND NECESSITY VS NON-NECESSITY

% OF INCOME SPENT ON A GOOD

ELASTICITY OF DEMAND HOW NARROWLY THE PRODUCT IS DEFINED

Equilibrium price quantity demand supply p

DEMAND SHIFTERS PRICE QUANTITY S D1 D2

DEMAND SHIFTERS

n SHIFTS IN POPULATION

DEMAND SHIFTERS n SHIFTS IN POPULATION n SHIFTS IN INCOME

INCOME AND CHANGES IN CONSUMPTION --- CAN BE POSITIVE (A NORMAL GOOD) OR NEGATIVE (INFERIOR GOOD)

A NORMAL GOOD: INCOME GOES UP --- CONSUMPTION INCREASES INCOME GOES DOWN -- CONSUMPTION GOES DOWN

INFERIOR GOOD : INCOME GOES UP -- CONSUMPTION DECLINES INCOME GOES DOWN -- CONSUMPTION INCREASES

Income Elasticity % Change in Expenditure / % Change in Income

Income Elasticity Can be negative (inferior) or positive (normal)

DEMAND SHIFTERS n SHIFTS IN POPULATION n SHIFTS IN INCOME n SHIFTS IN THE PRICE OF COMPETING PRODUCTS

GOODS MAY BE SUBSTITUTES OR COMPLEMENTARY OR INDEPENDENT

SUBSTITUTE GOODS WOULD BE LIKE COFFEE AND TEA IF THE PRICE OF COFFEE INCREASES THE DEMAND FOR TEA WOULD SHIFT OUT.

COMPLEMENTARY GOODS ARE GOODS THAT ARE CONSUMED TOGETHER -- LIKE BACON AND EGGS. IF THE PRICE OF BACON INCREASES THE DEMAND FOR EGGS MAY SHIFT INWARDS.

INDEPENDENT GOODS HAVE NO APPARENT RELATIONSHIP. A PRICE CHANGE IN ONE HAS NO IMPACT ON THE DEMAND FOR THE OTHER.

Cross Price Elasticity % Change in Consumption of Good B / % Change in Price of Good A

Cross Price Elasticity Can be positive or negative.

Cross Price Elasticity A positive elasticity would indicate a substitute relationship. Price of Beef Quantity of Pork

Cross Price Elasticity A negative elasticity would indicate a complementary relationship. Price of Bacon Quantity of Eggs

DEMAND SHIFTERS n SHIFTS IN POPULATION n SHIFTS IN INCOME n SHIFTS IN THE PRICE OF COMPETING PRODUCTS n SHIFTS IN CONSUMER TASTES AND PREFERENCES

A FROST IN FLORIDA AND THE PRICE OF ORANGE JUICE GOES UP - - DEMAND FOR ORANGE JUICE?

price quantity S D1 p1 p2 PRICE OF ORANGE JUICE GOES UP -- DEMAND FOR ORANGE JUICE?

MAD COW DISEASE OUT BREAK IN THE UNITED STATES -- DEMAND FOR BEEF?

price quantity S D1 D2 p1 p2 MAD COW DISEASE OUT BREAK IN THE UNITED STATES -- DEMAND FOR BEEF?

MAD COW DISEASE OUT BREAK IN THE UNITED STATES -- DEMAND FOR CHICKEN?

price quantity S D1 D2 p1 p2 MAD COW DISEASE OUT BREAK IN THE UNITED STATES -- DEMAND FOR CHICKEN?

price quantity S D1 D2 p1 p2 MAD COW DISEASE OUT BREAK IN THE UNITED STATES -- DEMAND FOR CHICKEN?

HIGHER UNEMPLOYMENT... POSSIBLE RECESSION -- DEMAND FOR BEEF?

price quantity S D1 D2 p1 p2 HIGHER UNEMPLOYMENT... POSSIBLE RECESSION -- DEMAND FOR BEEF?

RED WINE FOUND TO REDUCE CANCER RISK -- DEMAND FOR WINE?

price quantity S D1 D2 p1 p2 RED WINE FOUND TO REDUCE CANCER RISK -- DEMAND FOR WINE?

PRICE OF CHICKEN DECREASES -- DEMAND FOR PORK?

price quantity S D1 D2 p1 p2 PRICE OF CHICKEN DECREASES -- DEMAND FOR PORK?

Where we eat our food.