It is well-known that the seasons – fall, winter, spring, and summer – have an effect on food prices in a variety of ways. According to The Economist, the United States spends the least amount of money on food at approximately 12% (The Economist, 2013).However, there is no clear conclusion on what effect the different seasons have on microeconomics as a whole. As the example shows, seasons affect food prices, which, in turn affects economics. Thus, it is wholly conceivable that there is a significant impact of the different environmental seasons on microeconomics.
Different parts of the country are able to grow and harvest certain crops at different times of year. Furthermore, some crops are not available in all areas. The length of growing time has an effect on the amount of product available as well. For example, in Europe between 1993 and 2013, the growing period was lengthened by an average 11.4 days (European Environment Agency, 2015). Thus, Europe may have more products available for selling than other areas. This increase in growing season is caused by climate change. Based on this information, researchers have concluded that spring growing seasons may begin earlier, whereas autumn growing seasons may be extended due to warmer temperatures. As a result of the longer growing season, it is possible to have “proliferation of species that have optimal conditions for growth and development and can thus increase their productivity or number of generations,” also allowing for new species to be grown in areas previously deemed unsuitable (European Environment Agency, 2015).
Grocery stores strive to earn a profit based on providing what consumers want. However, there are times that consumer desires are for items that may not be easy to obtain due to the season of the year. For example, when eating local foods that are in season, consumers can expect to pay less. If purchasing food that is not in season, consumers can expect to pay more. Packaged herbs may cost $3 per half ounce during winter months, yet cost $1 to $2 for a large bunch of the same herb during the summer months when it is in season (Morris, 2014). Therefore, demand may exceed supply, which will affect market equilibrium. Since the product (herbs in this example) is scarce in the off-season, prices are high while supply is low. Scarcity is considered to be “a critical role in pricing and controlling supply” (Boundless, 2015). As a result, scarcity drives prices up and keeps supply low, despite the demand of consumers, allowing grocery stores to charge more for the product.
Scarcity, as shown in the preceding section, is one of the most impactful influences of product supply within the economic world. This can result in a waterfall effect that begins with farmers. Few farmers can grow products that are not in season. This would require specialized environments that are engineered to mimic the needed climate. It is reasonable to expect that this would increase selling costs in order to allow farmers to make a profit. Furthermore, as the environment is engineered, it is not exactly the same as the necessary environment, which may affect the quality of the product (such as size, taste, appearance). Despite these potential deficiencies, grocery stores can expect to pay more for the product due to increase costs that are experienced by the farmers. Grocery stores, too, expect to make a profit. Thus, they sell product at a higher rate to restaurants, which influences the prices restaurants charge for meals and products since their overhead increases as well.
Therefore, based on the waterfall effect, business economics may rise and fall based on the season, particularly within the food industry. This is largely based on the prices charged by farmers due to the cost of scarcity and the requirements to meet demand.