A supply and demand lesson with agriculture in one snapshot of a webpage...Oh, and I made some graphs too!

A supply and demand lesson with agriculture in one snapshot of a webpage (Morning Ag Clips)

Lower prices are NOT what farmers want to hear!

While not an exhaustive list, there are basically 3 things that can happen with Agricultural policy in the US that can affect the market for corn assuming the condition presented above---(1) buy up the surplus or (2) use subsidies or (3) do nothing.

I put together some slides to illustrate how each policy may affect the market.

Minimum Wage as a Price Floor Slides

Minimum Wage as a Price Floor Slides

Cherry-picking the Cherry Pickers. Should this grower be angry?

A bit of a internet storm over a photo a Michigan cherry grower posted to Facebook.

 A Michigan tart cherry farmer is leaving 14% of his crop this year to rot on the ground to comply with an industry marketing agreement intended to keep cherry prices stable. And he's not happy about it.

A frustrated Marc Santucci, who grows about 30 acres of cherries on his 80-acre Traverse City farm, put a photo of the dumped cherries, thick on the ground, on Facebook Tuesday — and the photo had been shared nearly 38,000 times as of Thursday afternoon. (From USA TODAY)

He is lamenting the fact that he is required to destroy a portion of his cherry crop in order to meet supply requirements of the Cherry Industry Administrative Board.  His method of disposal was to dump it on the ground (a common way).

The Cherry Board is charged with stabilizing the price growers receive for their cherry harvest.  The main tool to accomplish this is controlling the supply of cherries that make it to market.

Here is a series of slides I created to explain in Supply and Demand terms what I believe is going on.

   

Something's fishy in Alaska in the canned salmon market. Let's go to the graphs.

Another day, another easy pickin' economics lesson pulled from the headlines.

"Alaska Governor asks the Federal Government to buy Surplus Canned Salmon"

Gov. Sean Parnell has asked a federal agency to buy about 1 million cases of canned pink salmon to ease a glut that has weighed down prices for Alaska fishermen this year. 

Parnell made the request in a letter to U.S. Agriculture Secretary Tom Vilsack this week. He wants the USDA to purchase $37 million worth of canned pink salmon under a federal law that allows for buying surplus food from farmers and donating it to food banks or other programs. 

USDA purchased $20 million worth of salmon earlier this year, which Parnell called an important first step in reducing inventories to help slow a price decline that he said threatened the 2014 fishing season. 

He said remaining unsold inventories are driving prices to levels that threaten harvest activity this year and next, with the price of canned pink salmon 23 percent lower than a year ago and the advance price paid to fishermen down about 33 percent.

By purchasing the surplus canned salmon from Alaskan fish processors, the Governor is essentially asking for a de facto PRICE FLOOR be imposed on the market for Canned Salmon.

The thinking is this: Buy the surplus so the processors (1) don't have to unload it at lower prices (this is not mentioned in the article) and (2) the price the processors pay fisherman for their catch for the upcoming season will not decrease.  Easy, right?

Let's go to the graphs to see how this plays out.  Hope it helps you in understanding your lesson on this topic.