Some considerations on the supply of agricultural products.
Dear readers, I am sure you have heard at some point the word supply in different economic sectors, to clarify a little about what supply is, I will begin by quoting the definition constructed by Castellano (2000), which states that supply is the amount of products, whether agricultural or otherwise, that producers are willing to bring to market to sell at different prices as the case may be. In this sense, some specialists point out that when prices increase, producers are willing to bring more products to the market, but otherwise they will bring less product to the market.
Based on this premise, it can be said that there are two variables that can intervene: the price of the product and the production costs. Often, even though the prices of agricultural products decrease, the supply is maintained because the producers maintain a production methodology and it is not easy for them to change this methodology suddenly, there are some specific cases, such as milk production, where when the price decreases, producers automatically start making cheese and thus bring to the market a product that can match their production costs.
There are also other aspects that can influence the supply of agricultural products that are not related to price, including the following:
- First of all, it must be taken into account that agricultural enterprises are located in natural ecosystems, so the quality and quantity of the product will depend on climatic conditions, which can be very variable. Currently in the southern area of Lake Maracaibo cheese production has decreased in some sectors due to the high rainfall that has occurred, which has made herd management difficult, and this is reflected in the decrease in milk production.
- It should also be taken into account that the volumes of production in an agricultural system can be high, which sometimes makes it difficult to move, if the producer does not have adequate infrastructure to store the product or adequate transport system for the transfer that can affect the supply of such product, currently in Venezuela the problem with fuel has affected the agricultural company for the management of their agroecosystems and also in the transfer of their product, which has caused a decrease in the presence of Venezuelan products in the border areas and the presence of Colombian products prevails.
- Another element to consider, which to a certain extent is related to the previous one, is that some products are perishable, which sometimes loses the balance of supply when there is some difficulty in placing it on the market, sometimes part of that production is lost and others are sold at very low prices, which would increase to some extent the demand for the product, but the producer would not receive adequate income because their products have decreased in quality.
Dear readers, the above-mentioned aspects refer to individual agricultural production units, but the total supply of agricultural products is reflected in the sum of the quantities produced by the different agricultural production units during a given production time, depending on the type of product.
- Castellano, A. (2000). Commercialization of agricultural products. Ediciones de la Universidad Nacional Experimental Ezequiel Zamora UNELLEZ. Barinas: Venezuela.