The cattle ranchers in the Western U.S. are worried about rainfall shortage
Drought increases production costs by forcing ranchers to buy water at costs of thousands of dollars
Lack of nutrition adversely affects cattle who produce less milk and struggle to feed their calves
This article helps us better understand the factors that influence the supply of a product. One of the factors is natural conditions. The drought in the Western U.S. has made it harder for the ranchers to feed their cattles properly. When the cattles do not get adequate food and water, they produce less milk. In addition, their offpsrings also grow less healthy due to insufficient nutrition. The result is a decline in the supply of both milk and meat. When there is a decline in supply of a product, the entire supply curve moves to the left, resulting in a lower equilibirum quantity and a higher equilibirum price.
Another factor that influences the supply of a product is cost of production. The article mentions that the wells are dry due to lower-than-average rainfall this year. The rancher Evans has been forced to hire a truck to transport 8,000 gallons of water as well as expensive hay to feed his cattle. In other words, his cost of production has gone up. When the cost of production goes up, the supply curve moves to the left because of a decline in supply. This also causes a decline in equilibrium quantity as well as an increase in equilibirum price.
The graph below helps us understand how a decline in supply moves the supply curve to the left, and decreases the equilibrium quantity as well as increases the equilibirum price. This graph applies to both situations mentioned in the paper such as the decline in supply as a result of natural conditions and as a result of an increase in costs of production.