Usa'S Market Prices Of Wheat, Corn, Soybeans, Beef, And Hogs

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Wheat, soybeans and corn in the United States market are used for the purposes of domestic consumption and like an end stock. The quantity consumed is given as function of price. These quantities are also shown as trends of other variables in the market. Soybeans are consumed as either food, used as seeds and at times used for industrial purposes. On the other hand corn is used for industrial use to manufacture glucose, dextrose and ethanol production while wheat is domestically consumed while a certain percentage of it is exported.

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Comparing wheat prices between January 2016 and October 2018 shows that price per bushel of wheat was higher in 2018 selling at an average of 5.1 dollars per bushel while it sold at an average of 4.48 dollars per bushel in 2016 and 4.43 dollars in 2017. There was decreasing trend in price per bushel starting from January 2016 to September 2016, these might have been caused by an increase in supply of with a reduced demand of the wheat. The price started rising steadily from October 2016 to September 2018, between these periods, the demand of the wheat was high and the market was experiencing a reduced supply. Comparison of corn prices over the three years shows that the average price per bushel of corn was almost equal in 2016 and 2018 at 3.48 dollars and 3.47 dollars per bushel while the average price in 2017 was relatively lower at 3.38 dollars per bushel. Despite the small variations over the months, the market have tried to maintain a steady price. The price of soybeans was high in the months of June and July in 2016, these might have been caused by a low supply due to poor harvest or increased demand. In the rest of the period after august 2016, the price was moderate almost equal. The demand of the soybeans have been relative marching the supply therefore maintaining equality in the selling price.

Price of hog and beef vary constantly in themselves and in relation to each other. These variation is partly irregular and partly cyclic. The price of beef cattle per hundred weight are slightly more than twice the price of hogs for the three years. The trend show the ratio between the two has been irregular sometimes rising over different months and at times the ratio declines. Beef cattle per hundred weight decreased relatively from January 2016 to October 2016. These price started to rise steadily up to May 2017 after which the prices started to fluctuate times after times. Hog price per hundred weight has been higher in 2018 between January and July compared to 2016 and 2017. The demand for hog during these period must have been high therefore attraction higher prices. Close observation on the price of beef cattle shows and decrease in the price of these commodity. These may have been caused by increased cattle population therefore an increased supply. The increased supply than the demand attracts reduced price of the commodity. If the United States introduced price ceiling or price floor to each of these commodities, these would have effect on the supply of the commodities and its demand.

Examples; an introduction of 4.8 price floor on each hundred weight of wheat and 130 dollars per hundred weight of beef cattle these would trigger more production of wheat and cattle farming by farmers. These would lend to excess supply in the market of these two commodities due to high prices while the demand would be low due to high prices. The excess supply would encourage export of the wheat to outside markets. On the other hand if a price ceiling of 3.0 dollars per bushel of corn, 8.71 dollars per bushel of soybeans and 43.6 dollars per hundred weight of hogs was introduced, these would reduce the morale of the farmers, therefore reducing the supply drastically. The low price set will increase the demand as more consumers want to buy and stock goods at these low price. The low price would also help the government to sell to consumers the excess storage that would have been accumulated when the prices were higher.

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