Raw Deal in Lettuce

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First of all, let’s take a look at the situation by breaking down the points given. 

The fact that the crop or quantity was reduced is a very complicated event and defies the law of supply in that no matter how high the price goes the quantity cannot be raised if it can not be grown.  This would be labeled as the expectation shift factor of supply because the expectation was that the lettuce would be ready on time and in full abundance.  They plan accordingly and if the crop is as expected they can store some of the product and sell it later if the price rises.

The next point in the Imperial Valley says that quantity is a little higher but still affected. So until the crop can meet the quantity demanded it really makes no difference if the demand is high since the quantity cannot be produced from this area.

The fact that the demand remains high due to the mild weather on the East coast and the limited supply raises the price but the quantity cannot meet the demand. Until the technology can find ways to grow and protect crops from the changing weather patterns we remain with the fact that we can only sell what we can grow. 

According to the Department of Agriculture the 6 percent less planted means that it could be a little while before the crops will catch up.

The shift factors on the demand side are those of society’s income and taste.  We can live our daily lives without lettuce but if you are running a sandwich market and use lettuce is one of your selling points, you will pay a premium to buy that product.  The normal family with a limited income will simply say that price is too high at this point and would wait until the price goes down to make the purchase and will instead look at the price of other goods such as spinach to replace the lettuce. 

The prediction that in four weeks the Huron fields would be ready along with the recovery of the Arizona fields would then flood the market (quantity) with lettuce and for a very short period of time the price would remain high and then the demand would slow and drive the price back down to where the demand meets the supply and other things constant leveling out the price and demand closer to equilibrium. We would continue to hope that the growing technology will emerge to prepare us to overcome the hurdle of how unpredictable weather patterns can be manipulated or used differently in our varied growing seasons in America.

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