The paper "The Milk Market in Australia" is a great example of a report on macro and microeconomics. The article by Jane Stanley posted on the internet, titled “ Milk is now cheaper than water. Dairy farmers deserve better” was posted Tuesday, 17th December 2013. The article analyses difficulties facing the dairy farming industry in South West Victoria. Furthermore, the article exposes the main cause of poor milk prices in Australia despite the booming domestic and international demand for dairy products. This report will also provide a recommendation on the way forward and strategies of improving the deteriorating trend in the dairy business.
The sector is essential not only to the farmers but also to the community. Introduction Dairy farmers in a part of Australia are facing a hard time meeting their farm expenses. Their main source of income is deteriorating because the milk prices are so low. In fact, 21% of the farms are running at an absolute loss. Farmers are currently facing a huge crisis leaving them with no option other than doing away with the dairy business. Many of them are selling their farms, and switching their business lines. As various issues emerge as a result of poor milk prices, the economist believes that the country will soon face milk shortages.
This report will analyze the effect of poor prices in dairy farming, the situation of demand and supply. The report will also discuss the market actions, demand and supply curves, and the elasticity of supply and demand. Finally, a summary of all the issues discusses and recommendations will be provided at the end of this report. Analysis Supply In economics, supply refers to the number of goods that sellers are willing to supply at a given price all other factors remaining constant.
According to Browne, supply is an economic concept that is used to describe the number of goods that are available to the consumers at the agreed price. In Australia, the prices of milk have dropped at a higher rate because the regulation dictates the prices of the milk sold by the farmers. Farmers are not able to sell their farm products directly to the consumers because of regulations that are regulating the industry. This has affected the amount of supply of milk in the market because the farmers are changing the business.
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Jane, S. Milk is now cheaper than water. Dairy farmers deserve better. Retrieve on 29th December, 2013 from: http://www.theguardian.com/commentisfree/2013/dec/17/milk-is-now-cheaper-than-water-dairy-farmers-deserve-better