1. Agricultural Economics
An introduction to supply and demand

2. Introduction
The most successful farmers have an awareness of the market, that is who wants their produce, when and where.
To do this they need to have an understanding of economics – the relationship between supply and demand.
A simple way to start is to use graphs.

3. The Demand Curve
The demand curve is a graph showing the relationship between the price and demand for a product.
Normally there is an inverse relationship between the two variables which is the higher the price the lower the demand

4. Demand There are several factors which can affect demand:
The price of the product
Price of similar products
Taste and preferences of consumers
Income of consumers
Population size
Season
etc.
When there are changes to the demand the curve shifts to the left or right.

5. Demand
The curve shifts to the left if the demand reduces which could happen if there were a disease scare.
The curve shifts to the right if the demand increases possibly due to a seasonal effect.

6. The Supply Curve
The supply curve is a graph showing the relationship between the price and supply of a produce.
Normally there is direct relationship between the two variables which is as the price rises so to does the supply

7. Supply Like demand, there are many factors which can affect supply:
Price of the product
Cost of inputs
Number of producers
Skill of the farmer
Technology
Seasonal effects
Storage and transport
Government restrictions and incentives
etc.

8. Supply
The curve shifts to the left if supply reduces which could happen if there were a drought.
The curve shifts to the right if the supply increases possibly due to a mild winter.

9. Equilibrium Price
To understand the market place the two curves most be fitted together.