Shoppers should expect the price of fresh fruit and vegetables to rise and red meat to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Shoppers should expect the price of fresh fruit and vegetables to rise and red meat to fall as farmers are expected to record their most valuable year yet. The latest from Government commodity forecaster ABARES shows summer vegetables, stone fruit, apples, pears, and grapes could all be 15 to 25 per cent more expensive due to a shortage of harvest workers. Key points: · Australian farmers are on track to produce a record $65 billion of food and fibre in 2020- 21 In the short term, imported fruit and vegetables will go some way to boosting supply and reducing a price - The value of farm exports falls by 7 per cent to $45 billion due to COVID-19, domestic crunch for consumers. stock rebuild, and China trade sanctions • Consumers are warned the price of fresh But in the longer term, ABARES predicts difficulties with transport, seasonal shortages, and import restrictions because of biosecurity concerns could all contribute to more expensive fresh food. fruit and veg is to rise as the horticulture sector struggles without harvest workers Despite high prices at the cash register it is good news for farmers, with the value of farm produce setting a new record, jumping seven per cent to $65 billion for 2020-21. That is up from the previous record of $63.8 billion in 2016-17 and $59 billion last year. The coronavirus pandemic, China's trade sanctions, and a shift to rebuilding domestic sheep and cattle numbers mean that, according to ABARES, the value of exports will fall seven per cent year-on-year to $44.7 billion. ABARES chief analyst Jared Greenville described the latest outlook as a great result for farmers after years of drought. "It is a good time to be an Australian agricultural producer, but that's not to say that the sector doesn't have a few challenges around climate and the horticulture sector - say, around labour for this year -and trade," Mr Greenville said. Labour issues to drive up prices Mr Greenville said farmers who relied on foreign workers to harvest their crops were struggling to recruit labour, with the number of working holiday makers in Australia halved due to travel restrictions. He said while the worker shortage had not affected retail prices yet, it was expected to filter through to supermarkets and greengrocers in the new year. "Prices of most horticulture products hitting wholesale markets have been pretty steady and as expected, but what we do know is that peak period for harvest and peak labour demand kicks off in February," Mr Greenville said. "That could put at risk some harvests in some areas, so we're expecting prices to potentially rise between 15 to 25 per cent for some products. "That will depend if there's more domestic labour that producers can get a hold of. It is expected the labour shortage will drive-up the price of summer vegetables, stone fruit, pears, apples, berries and grapes. But there could be better news for the bottom line when it comes to buying red meat, with ABARES expecting that prices would fall in 2021. "World market prices for meat are also starting to come back a bit as China gets it African swine fever issue more under control," Mr Greenville said. "The pig herd is starting to rebuild, so that is putting downward pressure on that growth in protein and meat prices that we've seen over the last couple of years. "For consumers heading down to their local supermarket it is not such bad news to have some of the heat taken out of the market. "It'll make some of those red meat prices more affordable at home as well." Mr Greenville said as farmers were experiencing better growing conditions they were holding on to livestock for breeding, rather than sending cattle and sheep to slaughter. "There's really high demand, particularly domestically for restocking. That's actually held on longer than we'd expected," he said. The ABARES chief analyst said it was the winter crop, currently being harvested, that had driven the value of agriculture in 2020-21. "Our weather really drives our production outcomes. We've had a good winter cropping season – the second best on record, the highest in New South Wales- and it's really been the key driver in this bounce back," Mr Greenville said. Farm confidence never been so high The ABARES outlook coincided with agri-lender Rabobank's latest farm confidence survey which reported the "highest rural sentiment in two decades". The bank said farmers' confidence had rebounded strongly from years of drought. While 2020 has been a year of great uncertainty and challenge for everyone in the community, for farmers the extraordinary turnaround in the season has also made it one to remember," Rabobank chief executive Peter Knoblanche said. "After years of drought and low or no returns for some, the tables have well and truly turned," he said. 1. Use a demand and supply model to explain and illustrate why vegetable price in Australia is likely to rise. (Hint: Make sure you discuss the equilibrating process, and clearly outline the determinants causing change in demand and/or supply) (6 marks). 2. Drawing on the determinants of price elasticity of demand, explaining whether the demand for vegetable in Australia is elastic or inelastic. (3 marks) 3. (a) Assume vegetables are sold in a perfectly competitive market and farmers are making zero economic profit prior to the change. Explain and illustrate graphically, the effect of increase in price on the short run position of a vegetable farmer. (3 marks) (b) Based on the short run position identified in Q3 (a) explain and illustrate graphically effect of entry/exit on the long run position of the firm. (3 marks) (Hint: your answer should include graphs for both market and individual farmer) Shoppers should expect the price of fresh fruit and vegetables to rise and red meat to fall as farmers are expected to record their most valuable year yet. The latest from Government commodity forecaster ABARES shows summer vegetables, stone fruit, apples, pears, and grapes could all be 15 to 25 per cent more expensive due to a shortage of harvest workers. Key points: · Australian farmers are on track to produce a record $65 billion of food and fibre in 2020- 21 In the short term, imported fruit and vegetables will go some way to boosting supply and reducing a price - The value of farm exports falls by 7 per cent to $45 billion due to COVID-19, domestic crunch for consumers. stock rebuild, and China trade sanctions • Consumers are warned the price of fresh But in the longer term, ABARES predicts difficulties with transport, seasonal shortages, and import restrictions because of biosecurity concerns could all contribute to more expensive fresh food. fruit and veg is to rise as the horticulture sector struggles without harvest workers Despite high prices at the cash register it is good news for farmers, with the value of farm produce setting a new record, jumping seven per cent to $65 billion for 2020-21. That is up from the previous record of $63.8 billion in 2016-17 and $59 billion last year. The coronavirus pandemic, China's trade sanctions, and a shift to rebuilding domestic sheep and cattle numbers mean that, according to ABARES, the value of exports will fall seven per cent year-on-year to $44.7 billion. ABARES chief analyst Jared Greenville described the latest outlook as a great result for farmers after years of drought. "It is a good time to be an Australian agricultural producer, but that's not to say that the sector doesn't have a few challenges around climate and the horticulture sector - say, around labour for this year -and trade," Mr Greenville said. Labour issues to drive up prices Mr Greenville said farmers who relied on foreign workers to harvest their crops were struggling to recruit labour, with the number of working holiday makers in Australia halved due to travel restrictions. He said while the worker shortage had not affected retail prices yet, it was expected to filter through to supermarkets and greengrocers in the new year. "Prices of most horticulture products hitting wholesale markets have been pretty steady and as expected, but what we do know is that peak period for harvest and peak labour demand kicks off in February," Mr Greenville said. "That could put at risk some harvests in some areas, so we're expecting prices to potentially rise between 15 to 25 per cent for some products. "That will depend if there's more domestic labour that producers can get a hold of. It is expected the labour shortage will drive-up the price of summer vegetables, stone fruit, pears, apples, berries and grapes. But there could be better news for the bottom line when it comes to buying red meat, with ABARES expecting that prices would fall in 2021. "World market prices for meat are also starting to come back a bit as China gets it African swine fever issue more under control," Mr Greenville said. "The pig herd is starting to rebuild, so that is putting downward pressure on that growth in protein and meat prices that we've seen over the last couple of years. "For consumers heading down to their local supermarket it is not such bad news to have some of the heat taken out of the market. "It'll make some of those red meat prices more affordable at home as well." Mr Greenville said as farmers were experiencing better growing conditions they were holding on to livestock for breeding, rather than sending cattle and sheep to slaughter. "There's really high demand, particularly domestically for restocking. That's actually held on longer than we'd expected," he said. The ABARES chief analyst said it was the winter crop, currently being harvested, that had driven the value of agriculture in 2020-21. "Our weather really drives our production outcomes. We've had a good winter cropping season – the second best on record, the highest in New South Wales- and it's really been the key driver in this bounce back," Mr Greenville said. Farm confidence never been so high The ABARES outlook coincided with agri-lender Rabobank's latest farm confidence survey which reported the "highest rural sentiment in two decades". The bank said farmers' confidence had rebounded strongly from years of drought. While 2020 has been a year of great uncertainty and challenge for everyone in the community, for farmers the extraordinary turnaround in the season has also made it one to remember," Rabobank chief executive Peter Knoblanche said. "After years of drought and low or no returns for some, the tables have well and truly turned," he said. 1. Use a demand and supply model to explain and illustrate why vegetable price in Australia is likely to rise. (Hint: Make sure you discuss the equilibrating process, and clearly outline the determinants causing change in demand and/or supply) (6 marks). 2. Drawing on the determinants of price elasticity of demand, explaining whether the demand for vegetable in Australia is elastic or inelastic. (3 marks) 3. (a) Assume vegetables are sold in a perfectly competitive market and farmers are making zero economic profit prior to the change. Explain and illustrate graphically, the effect of increase in price on the short run position of a vegetable farmer. (3 marks) (b) Based on the short run position identified in Q3 (a) explain and illustrate graphically effect of entry/exit on the long run position of the firm. (3 marks) (Hint: your answer should include graphs for both market and individual farmer)
Expert Answer:
Answer rating: 100% (QA)
1 Using Supply and Demand Model to Explain the Rise in Price of Vegetable in Australia The Australian are likely to experience a rise in the prices of the vegetables as the forecasted value of the far... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
Students also viewed these economics questions
-
"Valley Fields Inc" , a producer of fresh fruit and fruit-based products, has been losing market share in recent years. The decision alternatives that the firm is considering are Sell the Firm, Keep...
-
Can a person with rational expectations expect the price of a share of Google to rise by 10% in the next month?
-
Can a person with optimal expectations expect the price of Google to rise by 10% in the next month?
-
Graph the solution of each system given in Problems 5-18. \(\left\{\begin{array}{l}x \geq 0 \\ y \geq 0 \\ x <500 \\ y \leq 1,000\end{array}ight.\)
-
Use the following information to determine the economic order quantity for Albert Company. Units required during the year ........................................................20,000 Cost to place...
-
In Exercise 3.86 on page 204, we construct an interval estimate for mean penalty minutes given to NHL players in a season using data from players on the Ottawa Senators as our sample. Some...
-
Ratliff Corporation produces lawn fertilizer spreaders. Ratliffs income statement shown has been prepared for August of the current year. Instructions: 1. Prepare Ratliffs August income statement...
-
The shareholders' equity section of Superior Corporations balance sheet as of December 31, 2015, is as follows: The following events occurred during 2016: Jan. 5 10,000 shares of authorized and...
-
Suppose that a firm has 5 bondholders each expecting to be paid today their principal of $ 1 million each. The firm is in default, as its going - concern value is only $ 3 million, falling short of...
-
Lucy is in charge of planning and coordinating a project. Following is the activity information for this project. Time (weeks) Activity Preceded By Optimistic Most Likely Pessimistic Lucy is in...
-
A stock's returns have the following distribution: Demand for the Probability of This Company's Products Demand Occurring Weak 0.1 Below average 0.1 Average 0.3 Above average Strong 0.3 0.2 1.0 Rate...
-
Explain one of the following five CMA concepts in depth and examine how the application or the analysis of the concept is practically relevant in your area or field of experience and expertise. 1....
-
A company produced 6200unuts of a product in a period. The product used 80 kg of material per 100 units of output. The inventory holding of the material reduced by 380 kg in the period. What quantity...
-
Type here to search Hardbody Fitness Center Hardbody Fitness Center is a well-established fitness facility located in a busy metropolitan area. The fitness center offers a wide range of services,...
-
Over a period of 252 days (1 year), a firm's unconditional VaR (p) was exceeded 19 times. a) Construct a 95% confidence interval for the unconditional VaR violation rate. b) Qualify the evidence for...
-
#include #include using namespace std; int main() { float op1; float op2; float result; int c; cout < < "please type in your choice - 1 to add, 2 to subtract, 3 to multiply, 4 to divide, 5 for...
-
A normal population has mean = 37 and standard deviation = 8. (a) What proportion of the population is between 19 and 29? (b) What is the probability that a randomly chosen value will be between 30...
-
Suppose you won a financial literacy competition and are given FJS10000 to invest, with the condition that investment can be done either in, i) Invest in Unit trust of Fiji or Invest in Fijian...
-
Axel Telecommunications has a target capital structure that consists of 70% debt and 30% equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If Axel...
-
If a typical firm reports $20 million of retained earnings on its balance sheet, could its directors declare a $20 million cash dividend without having any qualms about what they were doing? Explain...
-
Project X is very risky and has an NPV of $3 million. Project Y is very safe and has an NPV of $2.5 million. They are mutually exclusive, and project risk has been properly considered in the NPV...
-
Does monopoly retard innovation?
-
Which of the following is true of perfect competition but not true of monopoly? a. The firms average total cost curve is U-shaped. b. Marginal revenue is equal to price. c. A profit-maximizing firm...
-
Monopolists are like perfectly competitive firms in that a. both maximize profits at the output level where marginal revenue equals marginal cost. b. both could be earning either profits or losses in...
Study smarter with the SolutionInn App