Analysis of Supply and Demand Curves

In: Business and Management

Submitted By kellis213
Words 377
Pages 2
The article I chose to analyze is “Rising prices mean less beef for your buck.” The sentence that describes the market is: A dwindling number of cattle and growing export demand have tightened the supply and caused the average retail cost of fresh beef to climb. This article describes how the drought and extreme weather over the last year has caused such a decrease in cattle that consumers on all scales are feeling the impact in prices. Restaurants are forced to change the portion sizes and menu items to adapt to the rise in prices. It’s estimated that prices on beef have risen ten to twenty percent in the last year. The average retail cost of a pound of fresh beef in January 2014 was $5.04, in the next month it rose a significant 24 cents per pound. They are expecting demand and prices to increase in the summer. This year has been the highest in beef prices since 1987. I looked at the average of beef prices for the last five years; the average price for this time frame was $4.02. Beginning January 2014 we are already up a dollar a pound over the last five year average. The average beef consumption in the US is approximately sixty-seven pounds per year per person.
There are a lot of things that affect the cost of beef, with these things raising the drought and weather is not the only things to blame. Cost of feed, gas to transport, exporting from other countries are all things that can affect the prices of meat. As the prices go up, the demand from the consumer goes down, as we have other food options. This causes a downward slope in the demand curve, moving the shift to things like poultry and produce. I predict as people start being able to less afford beef the demand will go down forcing the producers to lower prices to sell more.

Resources:
Allen, E. (2014, April 18)” Rising prices mean less beef for your buck”…...

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