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ARE130 notes - ARE 130 Winter 201 Characteristics of...

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ARE 130 – Winter 201 Characteristics of Agricultural Markets #2 I. II. Class Notes 1. 2. 3. Sections in classrooms this week In the library - 2nd floor - after class for questions on the market member paper Market member paper due this Friday Derived Demand 1. Primary demand: retail demand- numbers 1-3 below. also called the retail/consumer. demand 2. Primary supply – at the farm gate -Ssubf - supply at the farm. Marketing system gets the product from the farm to the consumer. QR=QF 3. Derived demand 4. Derived supply Some points from the text: - The marketing margin is defined as the difference between the price paid by consumers and that obtained by producers. - Primary demand is the demand at the retail store. It entails the cost of the product at the farm gate PLUS all the costs of the marketing system from farm gate to retail. this is the farm cost. add it with the marketing margin to get the total costs. - Derived demand then is the reflection of the demand at retail translated at or to the farm gate.
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