Wednesday, January 28, 2009

Small Farms, Supply and Demand

“To think that someone’s going to make a living on five acres is ridiculous,” “That’s not a farm.”

A local official reaction to David Knaus a local Portland farmer trying to farm a scant five acres outside of Portland, reported in this article. As the article notes David and other farmers faces four problems: expensive land, limited water access, difficult learning curve, and hard labor.

In Madison, I purchased a lot of food grown locally and had produce delivered during the summer from a local farm, and worked a couple of weeks over a summer on the farm. So I'm sympathetic to local farming.

I wonder if the best thing Knaus could do to help himself make his farm more viable is to raise his prices? More from the article:

For those who can grow crops as well as Knaus, there’s no shortage of buyers. “Demand for this type of produce is far outstripping supply,” Knaus

I feel the need to provide a teachable moment about supply and demand. I don’t mean to be snarky here, but in economic terms when demand is greater than supply there is a shortage, in this case sellers should raise prices. If on the other hand if Knaus raised his prices and then he could not find buyers, because they bought from somewhere else (or purchased non-organic food) then it is likely that supply and demand are equal.

h/t to Michael Andersen, the reporter for this story who is also a Grinnellian
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1 comment:

Sinatra said...

what if everyone wants to buy, but is afraid to purchase due to fear of job loss, instead opting to save cash. Lower demand then merits reduction in output creating reduction in labor, or job loss. How do you get out of the spiral?