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Senior Reader
Posts: 4
Registered: ‎12-14-2014

Re: Running math

I disagree with both of you with regard to "Demand Function".  You are ignoring "supply" which ultimately determines the effect of demand on price.

 

If you have an unlimited supply (which we don't) and you have record demand, the price will still remain low because the supply needs a low price to move the product.  If you have unlimited demand (which we don't) and a limited supply, then the price will skyrocket as if the beef was being auctioned to the highest bidder.

 

What we do have is a limited supply and record demand (that is increasing) which in turn is supporting and driving the price increases.  The record demand is more a function of added markets than it is a function of increased consumption per capita.  The consumption per capita means nothing to the demand if the total numbers of consumers drop to the point of reducing demand.

 

The bottom line is that there is more demand for beef worldwide and the supply is not adequate to meet that demand. 

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