Wednesday Dec 11, 2019
Wednesday Dec 11, 2019
Wednesday Dec 11, 2019
In this podcast we discuss the seasonal nature of strawberries, and how the local harvest season affects supply & demand for imported berries, along with other economic principles.
This podcast was created by Kate Soanes and Gabriella Schaff.
Kate: Hey everyone. Welcome to Oz-onomics, a podcast created for and by students in introductory economics classes at SUNY Oswego.
GABRIELLA: In this series, we'll have discussions about various economic principles and how they apply to our day to day lives.
KATE: Are you ready?
GABRIELLA: Let's go.
K: Hey Gabby!
G: Hey Kate!
K: What do you want to apply economic principles to today?
G: How about food?
K: Need it to live!
G: Any particular kind of food?
K: Hmmm, how ‘bout fruit?
G: Let’s narrow it down a little more… K: Strawberries?
G: Yeah! Strawberries are my jam! *punchline cymbal crash*
K: What do we know about strawberries, aside from the fact that they’re delicious?
G: Well, here in Upstate New York, the strawberry growing season is very short…just a few weeks from mid-June to early July.
K: Thanks to modern refrigeration and transportation technology, we can import them from other areas to enjoy year-round, if we’re so inclined.
G: Well, are we so inclined?
K: Well, here’s a good time to talk about supply and demand. The laws of demand discuss the inverse relationship between price and quantity demanded, while all other variables remain constant. If this was the case, we’d be consuming the same amount of strawberries in December as we do in June…but we don’t do that, because all other variables aren’t constant. There are other factors that affect demand, such as tastes and preferences. In the case of Upstate NY consumers such as ourselves, strawberries are traditionally a summer item, so that’s when we want them most, even though we can get them year-round.
G: That’s not to say that we don’t take advantage of our ability to import…New Yorkers want more strawberries during the summer months than we can produce.
K: Let’s forget about our local harvest for a minute and shift our focus out west to California. They have a 12-month growing season, and 91% of the country’s strawberries are produced there.
G: As the weather warms up in New York, people get strawberries on the mind, and the demand curve shifts to the right, increasing the quantity of strawberries demanded at any price. This is when the berry section at the supermarket starts to take center stage. K: So things are going great…we want berries, they have berries, we buy them…everyone’s happy. So what happens when the New York harvest is ready?
G: Have you ever tasted a locally grown, fresh strawberry? K: Ah, there’s nothing like it! They are sweeter than candy, and they’re dirt cheap! The local variety are tastier and less expensive. So during the three-ish weeks that these are available, demand for the imports drops.
G: Hold on, if people want the local strawberries instead of the California strawberries, does that mean that the imports are an inferior good?
K: Not so fast! You and I might think local strawberries are superior for many reasons, but in economic terms, an inferior good is described as a product or service for which demand decreases when incomes rise, and that’s not the case here. Local strawberries are cheaper, remember?
G: That’s right! Let’s talk about why. We’ll start by considering costs of production, such as resources to grow, labor, packaging, and distribution. That last one’s a biggie. Think about how much more it costs to get a strawberry to your house from a farm in California versus a local farm.
K: Furthermore, local farms can save on labor and distribution costs by selling at farmstands and offering a U-Pick option, in addition to selling berries at the supermarket.
G: So how does the import market respond to this?
K: Think about how it would look on a graph. The availability of the local berries shifts the demand curve for imported berries to the left, lowering the equilibrium price. This basically means that while the New York berries are available, the stores can’t get away with charging as much for the California berries, so California supplies fewer of them.
G: After the short but sweet New York harvest season, the demand curve for imports shifts back to the right, prices rise again, and so does the quantity supplied. What other factors can affect price? K: What about scarcity?
G: Imagine if New York had an unusually dry summer, which affected our strawberry harvest. This would create a situation in which the quantity supplied is less than the quantity demanded. This creates a shortage, which drives the price up. K:
A weather event would likely affect all local produce, but if the shortage were somehow limited to just strawberries, you might start to see a greater demand for substitute products such as blueberries, blackberries or raspberries.
G: So there you have it! Next time you’re in the produce aisle, you might think of those delicious little berries in a whole new light! K: And we’ll leave you on that note. I’m Kate Soanes! G: I’m Gabby Schaff. K: Take care!
MICHAEL: There you have a folks on another edition of Oz-onomics, where economics becomes easier for Oswego students to understand where you get your money that you pay for your tuition worth. If you feel like being ahead of the curve, grab a seat, grab your phone, shift your fingers left and right. And download Oz-onomics on the podcast app. See you later.
The introduction to this podcast was provided by Kate Soanes and Gabriella Schaff. Michael Kolawale provided the outro. Music by Lobo Loco.