Demand And Supply

The relation of demand to supply affects the price of food in a way not difficult to understand. Where the supply is permanently small and the demand widespread, the price of the particular food material will be high, and vice versa. Olive oil is a good example of the permanently high-priced food. California olive oil brings a high price not only because it is pure and well flavored, but because many people want it, and the industry is a small one. Many years are needed to establish an olive grove, and olive raising is not a popular way of making money, because it is slow. One enterprising American firm has bought an olive grove in Spain, and is using new methods there, but the prod-uct, though delicious, is no cheaper. Although the manufacture of olive oil will doubtless remain a rather small industry, the use of olive oil is increasing, in this country, at least. It does not seem likely, therefore, to become a cheap form of fat.

We find nearly the opposite of this in cottonseed oil, a large supply and a relatively smaller demand making a low price. The seed (a by-product of the cotton industry) contains a large quantity of oil, and it is not all used as food. Therefore, it is permanently a low-priced fat, as contrasted with the permanently high-priced fat, olive oil.

Agricultural Conditions

There are two things of which the farmer can never feel sure, the kind of weather to expect and the general character of the season. Of course, the season affects the quality and the amount of any crop, and this, again, influences the price.

Another aspect of the effect of season on food is this: that a food is in its own locality cheaper when it is in season than at other times of year, when it has to be brought from a distance.

Insect pests and plant diseases not infrequently spoil a crop, and the market price goes up with the smaller supply. This is what happened not long since to the potato crop and potato prices, when potatoes were affected by the potato blight. Moreover, if the farmer succeeds in keeping his crop free from a particular pest, it means a more or less permanent increase in his expenses, for in fighting insects and fungi there is an outlay for machinery and chemicals, and much labor is expended. Unfortunately, injurious insects and plant diseases are on the increase, and this may mean a permanent rise in the cost of certain foods. Another fact has to be reckoned with in comparing the prices of different foods. Some vegetables are more difficult to raise than others, even when the season is favorable, and the insects at least partly conquered. Some plants have more vitality than others, and grow under almost any condition of soil and moisture.

Animal diseases must also affect the price of food. If a large number of cattle are found to have tuberculosis, and are condemned as food, healthy cattle bring a higher price, because, again, the supply is small in relation to the demand.