Business, 14.02.2020 05:50, bhopainting
The Washington Post article The Downsides of Cheap Corn reports that "U. S. farmer profits are expected to plummet by nearly 27 percent in 2014" according to USDA estimates.
For corn farmers, however, the problem is not because they are having trouble growing enough crops. On the contrary, "[h]ealthy American harvests are driving prices down significantly."
Corn prices fell from $ 6.9 /bushel $6.9/bushel in 2013 to $ 4.5 /bushel $4.5/bushel in 2014. According to the USDA, corn production grew from 10.8 billion bushels 10.8 billion bushels in 2012 (a drought year) to 13.93 billion bushels 13.93 billion bushels in 2013.
For the sake of simplicity, assume that there is a one-year lag before corn harvests reach the market (i. e., the production numbers for 2012 are reflected in the prices for 2013) and that the production numbers indicate equilibrium quantities.
Please illustrate the price change of corn from 2013 to 2014 based on the information presented, and click on Point C and move it to the new equilibrium for 2014.
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The Washington Post article The Downsides of Cheap Corn reports that "U. S. farmer profits are expec...
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