Supply and Demand of Beef in USA (Essay Sample)

Supply and Demand of Beef in USA
Name
Institutional Affiliation
Demand and Supply of Beef in the United States
The department of agriculture of the USA expects the demand for beef to decrease to 3.6 percent, next year as domestic production declines and imports are limited by tight world supply. (Chavas, 2015)It further ascertain that the downward stretch of beef will be experienced for another year to come.
DEMAND
Demand refers to the quantity or amount of a particular commodity or services that an individual consumer or a number of consumers are willing to purchase at a specific price. Usually, the demand curves slopes downwards because consumers often purchase more as price decreases
Factors affecting demand of beef include:
Consumer preference
Consumer preference affects the demand for beef in the United States. Demand for beef is expected to decline if the consumers prefer alternative/substitute proteins to beef for example poultry and pork thus beef’s demand will tend to decline, For example, when preference for high protein diets is high, beef demand increase in the market.
For example, recent increase in preference for chicken as is expected in the USA will result into decreased demand for beef
Price of beef
The price of beef also affects the demand for beef. Increase in prices of beef as a result of increase in production costs of beef and high prices of cattle feeds leads to increase in prices of beef hence a higher increase in price results into decrease in demand for beef. Conversely, if prices of beef decrease then the demand of beef will be expected to increase. However in some cases demand of beef may not be affected by price.
In the USA, it is expected that in the year 2015 the prices of beef will increase as a result of recent rising cost of animal feeds and energy costs hence increase in price reduces the demand
Consumers Income
Consumers Income in the economy of the United States of America also influences the demand for beef. When the economy of the country is strong, it thus implies high consumer income hence increase in disposable income as the economy increases thus the purchasing power of the consumer also increase hence this increases the demand of beef as the consumers will demand more of beef. When the economy is weak this results in a decline in consumer income thus reduces the purchasing power and disposable of the consumers thus this reduces the demand for beef.
For example, it is expected that the economy of the country will rise this increases purchasing power of the consumers and also the disposable income hence this will increase the demand for beef
The prices of other alternatives/substitute
The prices of other alternatives/substitute proteins like chicken, pork also affect the demand for beef in the economy. The increase in prices of substitute proteins results into increase of demand of beef as the consumer tend to demand more of beef than the more expensive alternatives. The increase in prices of beef results in higher demand for alternatives thus this reduces the demand for beef.
For example, it is expected that prices of beef will increase in 2015 due to rising prices in feeds thus this implies consumers will tend to switch to chicken as alternative thus this reduces demand for beef in the country
SUPPLY.
Supply refers to the amount or quantity of a product or service that producers are willing to sell at a particular price considering all other factors constant.
USA beef supply has been in reducing over the months and years.
Some of the influences that affect the supply of beef in the market are as follows:
Price of beef
The price of beef influences the supply of beef in that if the price of beef increases then this implies that producers will supply more of beef because it results in extra or higher revenue. Conversely, the decline in the price of beef results in decreased supply of beef as price decline reduces the profit margins of the suppliers. (Mash, 2015)
In the previous months, its expected price of beef will increase as a result of rising cost of inputs hence this may reduce demand for beef hence limiting the supply of beef
Government Polic...