Supply and Demand

A pizza by any other name…

Michael Coon
27 May 2020

As social distancing orders forced restaurants to stop serving in their dining rooms, many transitioned to serving customers with take-out meals or delivery. Food delivery services like Grubhub, UberEats, and DoorDash have seen dramatic increases in customers and revenue. Although…

Econ Everyday Classic: There’s Pea in My Coffee!

Michael Coon
15 May 2020

Due to a combination of increased global demand and poor harvests, coffee prices in 2011 rose some 69% to reach its highest price in over three decades. As a result, consumers around the world saw an increase in coffee prices in the grocery store and coffee shops. One country that did not see an increase in price, however, was Cuba. This is because the country fixes the price of coffee at 17 cents per 4oz bag, and rations the amount of coffee each household consumes. Once a major coffee exporter, a decline in production led the Cuban government to turn to global markets to supply its population with coffee. The rising prices resulted in the country importing $50 million worth of coffee.

Moon Mining

Michael Coon
7 May 2020

President Trump recently signed an executive order in support of the US opening exploration of resources on the moon and asteroids. The move follows a 2015 US law allowing for American companies to own and sell resources extracted from space. Although there is some dispute over the legality of the move, the White House is moving forward with developing a legal framework dubbed the “Artemis Accords,” which would regulate operations and ownership of extracted resources.

Frites Market on the Fritz

Michael Coon
1 May 2020

Like many countries around the world, Belgium is fighting a battle against the COVID-19 virus. As part of social distancing, restaurants and bars are closing down or limiting service. As a result, much of the food that was destined to…

PBS News Hour: “The Cascading Economic Effects of Plummeting Oil Prices”

Veronica Horton
28 April 2020

The fallout from the global COVID-19 pandemic continued this week as oil prices plunged below zero. In a highly unusual situation, producers were quite literally paying buyers to take excess supplies. The crisis came as global demand for oil continued to be at record lows as government mandated shutdowns kept businesses closed and consumers at home in nearly every country in the world. Despite a recent agreement among OPEC + producers to reduce production by 10 percent, the glut of oil on the market was significant. With storage options all but exhausted and no easy way to simply stop production, it is unclear just what will happen next. Prices will almost certainly stay low though, even as the global economy begins to reopen, at least until existing excess supplies work their way through the system. Just how long it will take for demand to return to pre-COVID-19 levels is uncertain as signs that the world may be in for a prolonged recessionary period continue to grow.

CNN Business: “Why oil prices are crashing and what it means”

Veronica Horton
21 April 2020

This video explores the standoff between Saudi Arabia and Russia over oil production. The clash between the two countries reached new levels at a recent meeting in Vienna where OPEC+ countries attempted to hammer out a solution to the current glut of oil on the market that is driving prices to long time lows. While it is clear that global demand for oil is at one of its lowest points ever thanks to the closures of most economies in respond to the COVID-19 pandemic, and that production of oil must be slowed, Russia is unwilling to do so, and Saudi Arabia has refused to reduce its production unless Russia does as well. While further negotiations have produced some acknowledgement that all oil producers will need to cut production at least until the global economy is reopened, just what those reductions will look like is still unknown, suggesting that uncertainty will continue to roil oil markets and for now prices are likely to remain low.

Farmers Dump Milk and Eggs as Restaurant Demand Falls

NickelsMcHughMcHugh
10 April 2020

Over the last few weeks, shoppers at supermarkets across the country have stocked up on versatile staples like milk, bread, and eggs that are well-suited for hunkering at home. But as many meat and dairy producers ramp up production to satisfy this increasing demand, food companies that serve clients like restaurants and schools are drastically scaling back. With many eating establishments now closed or take-out only due to coronavirus containment, food suppliers have seen demand for their services plummet. As a result, a number of food companies have either significantly cut production or even thrown out excess stock in order to prevent a catastrophic market-wide price drop.

Small Businesses Have Trouble Securing Vital Loans

NickelsMcHughMcHugh
7 April 2020

The ongoing coronavirus pandemic has caused countless restaurants and stores across the country to alter their services or close entirely, some for as long as a month so far. This stretch of downtime has been devastating for many small businesses that usually get by on week-to-week sales. At Old Town Pizza & Brewing in Portland, Oregon, owner Adam Milne had to lay off two-thirds of his staff as the brewpub transitioned into carry-out only service. In the process he racked up nearly $25,000 in credit card debt to pay for rent, utilities, and other mounting expenses. Although Milne has tried to secure a small business loan to stay afloat, he’s had no success so far.

Crisis Hits Farmers: Some face labor shortages, others face customer shortages

Michael Coon
3 April 2020

US agriculture is suffering major setbacks related to the Coronavirus outbreak. Stay-at-home orders have caused a significant decline in restaurant business, forcing many to temporarily close or cut down to pick-up and delivery service only. Additionally, airlines have been grounded, cruise ships are no longer leaving ports, theme parks have closed, and school has been cancelled. These and other hospitality-related businesses are major destinations for fresh fruits and vegetables. As a result, farmers have millions of pounds of produce they cannot sell. While some of it will be donated to food banks and shelters, much of it will simply be destroyed. Harvesting is much more expensive, and the product is perishable.

Chicken Little is an Increasingly Rare Bird

EVs: Driving Change at Convenience Stores

Who’s In The Driver’s Seat: The Changing Dynamics of Auto Production

China’s Population is Declining – Too hot, too cold, or just nice for its Economic Development?

The Externalities Effect of Child Firearm Fatalities in the States

Why is Everything Getting So Expensive?

Understanding the U.S. Labor Market – A January 2023 Snapshot

The New Economics of Car Production

Looming Water Crisis – What can YOU do to Conserve Water?

U.K. Economy Three Years after Brexit