market demand and supply essay

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Finding Equilibrium

The bottom line.

• Macroeconomics

Introduction to Supply and Demand

• A Practical Guide to Microeconomics
• Economists' Assumptions in their Economic Models
• 5 Nobel Prize-Winning Economic Theories
• Understanding Positive vs. Normative Economics
• What Factors Influence Competition in Microeconomics?
• How Does Government Policy Impact Microeconomics?
• Understanding Microeconomics vs. Macroeconomics
• Differentiate Between Micro and Macro Economics
• Microeconomics vs. Macroeconomics Investments
• Introduction to Supply and Demand CURRENT ARTICLE
• Is Demand or Supply More Important to the Economy?
• Law of Demand
• Demand Curve
• Law Of Supply
• Supply Curve
• Price Elasticity of Demand
• Understanding Elasticity vs. Inelasticity of Demand
• Factors Determining the Demand Elasticity of a Good
• What Factors Influence a Change in Demand Elasticity?
• What Is the Concept of Utility in Microeconomics?
• What Is the Utility Function and How Is it Calculated?
• Total Utility
• Marginal Utility
• Law Of Diminishing Marginal
• What Does the Law of Diminishing Marginal Utility Explain?
• Economic Equilibrium
• Income Effect
• Indifference Curve
• Consumer Surplus
• Comparative Advantage
• Economies of Scale: What Are They and How Are They Used?
• Perfect Competition
• Invisible Hand
• Market Failure

The law of supply and demand is a fundamental concept of economics and a theory popularized by  Adam Smith  in 1776. The principles of supply and demand are effective in predicting market behavior. Whether an individual is a manufacturer or a consumer, the supply and demand equilibrium is relevant in daily market transactions.

Key Takeaways

• The law of supply and demand was popularized by Adam Smith in 1776.
• Consumer demand for a good commonly decreases as its price rises.
• As prices of a good increase, producers manufacture more to realize more profits.

Consumer demand for a good commonly decreases as its price rises. The figure below depicts the relationship between the price of a good and its demand from the consumer's standpoint. The demand curve is portrayed from the view of the consumer, whereas supply graphs are drawn from the producer's perspective.

If televisions were priced at $5 each, then consumers would purchase them and probably buy more TVs than they need based on price. The demand will remain high. If the price is $50,000, this good would likely be considered a luxury good, and demand would be low.

Demand is the quantity of a good that consumers are willing and able to purchase at various prices at a given time.

This example assumes that product differentiation does not exist. There is only one type of product sold at a single price to every consumer. In this closed scenario, the item is not an essential human necessity such as food or shelter, does not have a substitute, and consumers expect prices to remain stable. 

The supply curve considers the relationship between the price and available supply of an item from the producer's perspective rather than the consumer's.

When prices of a product increase, producers are willing to manufacture more of the product to realize greater profits. Falling prices depress production as producers may not recover input costs. If the costs to produce a TV are $50, production would be unprofitable when the selling price of the TV falls below $50.

If television prices are $1,000, manufacturers will focus on producing television sets over ventures and provide incentives to build more TVs. The behavior to seek maximum profits forces the supply curve to be upward-sloping. 

An underlying assumption of the theory lies in the producer taking on the role of a price taker. Rather than dictating the prices of the product, this input is determined by the market, and suppliers only face the decision of how much to produce, given the market price. Optimal scenarios are not always the case, such as in monopolistic markets.

Consumers typically look for the lowest cost, and producers test their products at the highest price. When prices become unreasonable, consumers change their preferences and move away from the product.

A proper balance must be achieved where both parties engage in ongoing business transactions to benefit consumers and producers. In supply and demand theory, the optimal price that results in producers and consumers achieving the maximum combined utility occurs where the supply and demand lines intersect.

In What Types of Economies Are Laws of Supply and Demand Less Reliable?

If the economic environment is not a free market, supply and demand are not influential factors. In  socialist economic systems , the government typically sets commodity prices regardless of the supply or demand conditions.

Does the Law of Supply and Demand Determine Market Conditions?

Multiple factors affect markets on both a microeconomic and a macroeconomic level. Supply and demand guide market behavior but do not determine it. Supply and demand are important factors, and Adam Smith referred to them as the  invisible hand  that guides a free market.

Does the Law of Supply and Demand Apply Only to Consumer Goods?

The theory of supply and demand relates not only to physical products such as television sets but also to wages and labor. More advanced theories of microeconomics and macroeconomics often adjust the assumptions and appearance of the supply and demand curve to illustrate concepts like economic surplus, monetary policy, aggregate supply and demand , fiscal stimulation, elasticity, and shortfalls.

The market theory of supply and demand was popularized by Adam Smith in 1776. Consumer demand for a good decreases as its price rises. As prices rise, producers manufacture more to gain more profits. The optimal price that shows an equilibrium between supply and demand is where the supply and demand lines intersect on a graph.

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3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services

Learning objectives.

By the end of this section, you will be able to:

• Explain demand, quantity demanded, and the law of demand
• Explain supply, quantity supplied, and the law of supply
• Identify a demand curve and a supply curve
• Explain equilibrium, equilibrium price, and equilibrium quantity

First let’s first focus on what economists mean by demand, what they mean by supply, and then how demand and supply interact in a market.

Demand for Goods and Services

Economists use the term demand to refer to the amount of some good or service consumers are willing and able to purchase at each price. Demand is fundamentally based on needs and wants—if you have no need or want for something, you won't buy it. While a consumer may be able to differentiate between a need and a want, from an economist’s perspective they are the same thing. Demand is also based on ability to pay. If you cannot pay for it, you have no effective demand. By this definition, a person who does not have a drivers license has no effective demand for a car.

What a buyer pays for a unit of the specific good or service is called price . The total number of units that consumers would purchase at that price is called the quantity demanded . A rise in price of a good or service almost always decreases the quantity demanded of that good or service. Conversely, a fall in price will increase the quantity demanded. When the price of a gallon of gasoline increases, for example, people look for ways to reduce their consumption by combining several errands, commuting by carpool or mass transit, or taking weekend or vacation trips closer to home. Economists call this inverse relationship between price and quantity demanded the law of demand . The law of demand assumes that all other variables that affect demand (which we explain in the next module) are held constant.

We can show an example from the market for gasoline in a table or a graph. Economists call a table that shows the quantity demanded at each price, such as Table 3.1 , a demand schedule . In this case we measure price in dollars per gallon of gasoline. We measure the quantity demanded in millions of gallons over some time period (for example, per day or per year) and over some geographic area (like a state or a country). A demand curve shows the relationship between price and quantity demanded on a graph like Figure 3.2 , with quantity on the horizontal axis and the price per gallon on the vertical axis. (Note that this is an exception to the normal rule in mathematics that the independent variable (x) goes on the horizontal axis and the dependent variable (y) goes on the vertical axis. While economists often use math, they are different disciplines.)

Table 3.1 shows the demand schedule and the graph in Figure 3.2 shows the demand curve. These are two ways to describe the same relationship between price and quantity demanded.

Demand curves will appear somewhat different for each product. They may appear relatively steep or flat, or they may be straight or curved. Nearly all demand curves share the fundamental similarity that they slope down from left to right. Demand curves embody the law of demand: As the price increases, the quantity demanded decreases, and conversely, as the price decreases, the quantity demanded increases.

Confused about these different types of demand? Read the next Clear It Up feature.

Clear It Up

Is demand the same as quantity demanded.

In economic terminology, demand is not the same as quantity demanded. When economists talk about demand, they mean the relationship between a range of prices and the quantities demanded at those prices, as illustrated by a demand curve or a demand schedule. When economists talk about quantity demanded, they mean only a certain point on the demand curve, or one quantity on the demand schedule. In short, demand refers to the curve and quantity demanded refers to a (specific) point on the curve.

Supply of Goods and Services

When economists talk about supply , they mean the amount of some good or service a producer is willing to supply at each price. Price is what the producer receives for selling one unit of a good or service . A rise in price almost always leads to an increase in the quantity supplied of that good or service, while a fall in price will decrease the quantity supplied. When the price of gasoline rises, for example, it encourages profit-seeking firms to take several actions: expand exploration for oil reserves; drill for more oil; invest in more pipelines and oil tankers to bring the oil to plants for refining into gasoline; build new oil refineries; purchase additional pipelines and trucks to ship the gasoline to gas stations; and open more gas stations or keep existing gas stations open longer hours. Economists call this positive relationship between price and quantity supplied—that a higher price leads to a higher quantity supplied and a lower price leads to a lower quantity supplied—the law of supply . The law of supply assumes that all other variables that affect supply (to be explained in the next module) are held constant.

Still unsure about the different types of supply? See the following Clear It Up feature.

Is supply the same as quantity supplied?

In economic terminology, supply is not the same as quantity supplied. When economists refer to supply, they mean the relationship between a range of prices and the quantities supplied at those prices, a relationship that we can illustrate with a supply curve or a supply schedule. When economists refer to quantity supplied, they mean only a certain point on the supply curve, or one quantity on the supply schedule. In short, supply refers to the curve and quantity supplied refers to a (specific) point on the curve.

Figure 3.3 illustrates the law of supply, again using the market for gasoline as an example. Like demand, we can illustrate supply using a table or a graph. A supply schedule is a table, like Table 3.2 , that shows the quantity supplied at a range of different prices. Again, we measure price in dollars per gallon of gasoline and we measure quantity supplied in millions of gallons. A supply curve is a graphic illustration of the relationship between price, shown on the vertical axis, and quantity, shown on the horizontal axis. The supply schedule and the supply curve are just two different ways of showing the same information. Notice that the horizontal and vertical axes on the graph for the supply curve are the same as for the demand curve.

The shape of supply curves will vary somewhat according to the product: steeper, flatter, straighter, or curved. Nearly all supply curves, however, share a basic similarity: they slope up from left to right and illustrate the law of supply: as the price rises, say, from $1.00 per gallon to $2.20 per gallon, the quantity supplied increases from 500 gallons to 720 gallons. Conversely, as the price falls, the quantity supplied decreases.

Equilibrium—Where Demand and Supply Intersect

Because the graphs for demand and supply curves both have price on the vertical axis and quantity on the horizontal axis, the demand curve and supply curve for a particular good or service can appear on the same graph. Together, demand and supply determine the price and the quantity that will be bought and sold in a market.

Figure 3.4 illustrates the interaction of demand and supply in the market for gasoline. The demand curve (D) is identical to Figure 3.2 . The supply curve (S) is identical to Figure 3.3 . Table 3.3 contains the same information in tabular form.

Remember this: When two lines on a diagram cross, this intersection usually means something. The point where the supply curve (S) and the demand curve (D) cross, designated by point E in Figure 3.4 , is called the equilibrium . The equilibrium price is the only price where the plans of consumers and the plans of producers agree—that is, where the amount of the product consumers want to buy (quantity demanded) is equal to the amount producers want to sell (quantity supplied). Economists call this common quantity the equilibrium quantity . At any other price, the quantity demanded does not equal the quantity supplied, so the market is not in equilibrium at that price.

In Figure 3.4 , the equilibrium price is $1.40 per gallon of gasoline and the equilibrium quantity is 600 million gallons. If you had only the demand and supply schedules, and not the graph, you could find the equilibrium by looking for the price level on the tables where the quantity demanded and the quantity supplied are equal.

The word “equilibrium” means “balance.” If a market is at its equilibrium price and quantity, then it has no reason to move away from that point. However, if a market is not at equilibrium, then economic pressures arise to move the market toward the equilibrium price and the equilibrium quantity.

Imagine, for example, that the price of a gallon of gasoline was above the equilibrium price—that is, instead of $1.40 per gallon, the price is $1.80 per gallon. The dashed horizontal line at the price of $1.80 in Figure 3.4 illustrates this above-equilibrium price. At this higher price, the quantity demanded drops from 600 to 500. This decline in quantity reflects how consumers react to the higher price by finding ways to use less gasoline.

Moreover, at this higher price of $1.80, the quantity of gasoline supplied rises from 600 to 680, as the higher price makes it more profitable for gasoline producers to expand their output. Now, consider how quantity demanded and quantity supplied are related at this above-equilibrium price. Quantity demanded has fallen to 500 gallons, while quantity supplied has risen to 680 gallons. In fact, at any above-equilibrium price, the quantity supplied exceeds the quantity demanded. We call this an excess supply or a surplus .

With a surplus, gasoline accumulates at gas stations, in tanker trucks, in pipelines, and at oil refineries. This accumulation puts pressure on gasoline sellers. If a surplus remains unsold, those firms involved in making and selling gasoline are not receiving enough cash to pay their workers and to cover their expenses. In this situation, some producers and sellers will want to cut prices, because it is better to sell at a lower price than not to sell at all. Once some sellers start cutting prices, others will follow to avoid losing sales. These price reductions in turn will stimulate a higher quantity demanded. Therefore, if the price is above the equilibrium level, incentives built into the structure of demand and supply will create pressures for the price to fall toward the equilibrium.

Now suppose that the price is below its equilibrium level at $1.20 per gallon, as the dashed horizontal line at this price in Figure 3.4 shows. At this lower price, the quantity demanded increases from 600 to 700 as drivers take longer trips, spend more minutes warming up the car in the driveway in wintertime, stop sharing rides to work, and buy larger cars that get fewer miles to the gallon. However, the below-equilibrium price reduces gasoline producers’ incentives to produce and sell gasoline, and the quantity supplied falls from 600 to 550.

When the price is below equilibrium, there is excess demand , or a shortage —that is, at the given price the quantity demanded, which has been stimulated by the lower price, now exceeds the quantity supplied, which has been depressed by the lower price. In this situation, eager gasoline buyers mob the gas stations, only to find many stations running short of fuel. Oil companies and gas stations recognize that they have an opportunity to make higher profits by selling what gasoline they have at a higher price. As a result, the price rises toward the equilibrium level. Read Demand, Supply, and Efficiency for more discussion on the importance of the demand and supply model.

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Demand and Supply Essay

Introduction.

Economics plays an important role in the healthcare industry in the US. The relationship between different organizations and individuals involved in the production and consumption of health goods and services in the US is a complex one. The economic need of an individual in terms of healthcare is main idea behind the consumption while organizations provide the above needed services.

The healthcare industry is subject to all the economic trends through production of goods and services which in this case are the drugs, equipment and the services rendered by medical professionals. Additionally, it’s also shaped by the forces of demand and supply; demand in this case denoting the willingness and capacity of consumers to pay for the healthcare products on offer.

Supply on the other hand denotes the presence centers that provide medical services and the ability for the manufacturers of these products avail the products to the consumers. Besides the forces of demand and supply, there are economic variables including time, accessibility of drugs and services and user charges as applied in the industry.

The discussion will focus on the above principles of economics as they apply to the healthcare industry in the US. Precisely, the discussion will focus on the supply and demand of endocrinology services in the US. There will also be a discussion on the economic relationship between the availability of these services in the US and the economic variables involved especially cost and access.

Endocrinologists help in the treatment of endocrine disorders associated with diabetes conditions. Besides cancer and heart disease, diabetes is ranked as the other major disease among the American population.

Demand Side

The rise in the cases of diabetes, has led to a rise in demand of endocrinology services in the US. On the other hand however, the number of endocrinologists entering the market in the US has reduced considerably. The situation has therefore created a supply demand mismatch in the availability of these services.

According to Stewart (2008, p. 1), private clinics, publicly run institutions, academic medical centers and the pharmaceutical industry have seen their needs for endocrinologists increase. According to him, the demand for endocrinology services is going to rise further considering the fact that over 44 million people in the US need their services. Additionally, over 50% of the US population being obese means that endocrinologists will be needed more in the coming years.

Supply Side

The above demand is against a supply of slightly above 5000 endocrinologists available in the US according to a 2006 survey. Over 1500 of these are not primary care providers, leaving an average of 4000 endocrinologists in active practice. The above scenario clearly shows demand outstripping supply.

According to Mercer (2009, p. 1), the demand for endocrinology services is likely to rise further as many of the professionals reach retirement age in this decade. The above demand – supply mismatch has had its consequences felt by the consumers of these services in the US.

Economic Variables

Basic economics dictate that the most likely effect when demand outstrips supply is the rise in price of goods and services. Sometimes, it may also affect the quality of the service being delivered and how it’s being delivered. Mercer (2009, p. 1) asserts that the disparity in the demand and supply of endocrinologists in the US has resulted in the failure to treat endocrinology patients in the traditional office model.

Stewart concurs in his analysis when he says that the shortage of endocrinologists negatively impacted access to care by patients with diabetes, obesity, adrenal disease and thyroid cancer. This shortage of endocrinologist has led to limited access and care of endocrinology patients. There are verified reports of patients waiting up to 6 months to gain access to an endocrinologist. As expected, the costs associated with accessing the services have risen.

This is partly because of the negative consequences of the failure to treat the condition appropriately due to waiting time and largely because of the economical factor of less supply. Instead they have adopted the volume solution to resolve the problem. Additionally, the industry has adopted an approach of engaging primary care physicians to handle endocrinology patients. This primarily aims at availing wide access to the services to the people who need them.

Rizza et al (2003, p. 1985) asserts that the demand for endocrinologists will exceed supply for the next two decades at least up to the year 2020. According to a supply model developed by the Rizza, the difference between the demand and supply of these services will reduce in the first decade of the 21 st century as new professionals enter the field.

However, expected retirement of many endocrinologists who will be above 50 years during the decade will widen the demand and supply mismatch. There is sufficient reason to believe that improved supply of endocrinologists to the market in the US will eliminate most of the problems brought by the shortage.

There is need to prop up the supply of endocrinologists in the US through the implementation of measures influenced by the factors of supply. First, it’s important that the trends in residence fellowships be improved so that the number of endocrinologists who complete the fellowships every year increases.

Secondly, there is need to raise the retirement age of medical practitioners but the raise should mainly target the endocrinology profession. That way the rate of attrition from the profession will be stemmed and effectively improving supply of the professionals. The above factors are expected to boost supply of the professionals to the market to end the bridge the gap between their demand supply deficits.

The above analysis represents the integration of the principles of economics especially demand and supply in the healthcare industry. Medical services in this case endocrinology are treated like any other commodity that I available in the market for the highest bidder. Like in pure economics, the economic variables of cost and access to good and services are affected by demand and supply.

A rational analysis on the number of professionals in the field of endocrinology in the US and the demand that is currently available easily suggests a deficit in supply. The mismatch between the forces of demand and supply therefore has led to the rise n the costs associated with endocrinology services.

Additionally, access to the services has also been affected. Increasing the supply of this service will weigh down on demand and an equilibrium position will be achieved. The measures suggested in the last part of the discussion are meant to increase the supply through the supply chain which in this case is the training institutions.

Mercer, A. (2009). Supply and Demand. Diabetes Health. Retrieved from https://www.diabeteshealth.com/

Rizza, A.R. et al. (2003). A model to determine workforce needs for endocrinologists in the US 2020*. Journal of Clinical Endocrinology & Metabolism 88(5).1970- 1987.

Stewart, A. (2008).The United States Endocrinology Workforce: A Supply-Demand Mismatch. The Journal of Clinical Endocrinology & Metabolism April 1, 2008 vol. 93 no. 4 1164-1166.

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Trending Discussions

Premium content, gold supply and demand imbalance fuels price surge.

• Gold prices hit a record high due to rising geopolitical tensions, particularly the conflict between Lebanon and Israel, and uncertainty surrounding the US election.
• Investors are turning to gold as a safe haven asset and a hedge against inflation and market volatility.
• Factors such as falling interest rates, China's stimulus measures, and a strong US economy are also contributing to the surge in gold demand.

Gold prices surged to an all-time high of $2,730 (£2,093) this morning as investors sought safe-haven assets amid rising geopolitical tensions .

The rally has come as conflict intensified between Lebanon and Israel, with fears growing over a broader regional escalation.

The uncertainty of the US election outcome, with particular concerns over Donald Trump’s improved odds in betting markets, has also pushed investors towards safe haven assets.

“Gold typically attracts investors’ attention when they are looking for a store of value during uncertain times”, said AJ Bell’s Russ Mould.

Gold is a proven hedge against inflation as its investment is seen as a preservation of the real value of assets when other prices rise. It’s worth remains resilient when other markets aren’t.

It tends to rally as interest rates fall due to lower return on cash from banks, or bonds from governments, which push investors away from cash or debt towards the metal .

Hargreaves Lansdown noted that investor appetite for gold has been bolstered by the “risk of over spill into wider conflict in the region” and uncertainty around the upcoming elections, making gold an attractive asset for those seeking to hedge against market volatility.

“Gold’s rally is a direct reflection of the fear and instability facing investors”, Mould added.

Kathleen Brooks, founder of Minerva Analysis, said China’s stimulus and a strong US economy are also boosting demand for gold.

Brooks also argued that as well as the geopolitical drivers, “the second driver is old-fashioned supply and demand factors that are influencing the gold price.”

“Gold demand hit a record high in the second quarter, and we expect this was extended in the third quarter”, she said, “with no increased supply, the price of gold will naturally rise.”

By City AM 

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Home — Essay Samples — Economics — Supply and Demand — Understanding Supply and Demand Dynamics

Understanding Supply and Demand Dynamics

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Published: Jan 30, 2024

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Equilibrium, market dynamics and price changes, government interventions.

• Blanchard, Olivier and Jordi Gal"The Macroeconomic Effects of Oil Price Shocks: Why are the 2000s so Different from the 1970s?" in NBER Macroeconomics Annual, Volume 23. 2008.
• Mankiw, N.G. Principles of Economics, 8th ed., Cengage Learning, 2017.
• McConnell, Campbell and Stanley Brue. Economics: Principles, Problems, and Policies, 21st ed., McGraw-Hill Education, 2018.

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Dynamics between FinTech and financial market: Supply-driven or Demand-guided?

• Zekai Tu 1 , 
• Runze Yang 1 , 
• Cunyi Yang 2 ,  , 
• 1. School of Finance, Shanghai University of Finance and Economics, Shanghai, China
• 2. Lingnan College, Sun Yat-sen University, Guangzhou, China
• Received: 20 July 2024 Revised: 26 September 2024 Accepted: 29 September 2024 Published: 15 October 2024

JEL Codes: G21, O33, E44

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This paper examined the dynamic relationship between FinTech development and financial development using the time-varying parameter structural vector autoregression (TVP-SV-VAR) model to analyze their impulse response relationship. The results showed that the impact of FinTech development on financial development varies across different periods. In China, before the first half of 2021, financial development mainly drove FinTech development through demand. Afterward, FinTech development promoted financial development by providing new technological tools and services. In the United States, FinTech innovation and application mainly influenced financial development through supply-driven mechanisms. After the second half of 2022, as FinTech infrastructure improved, its positive impact on the financial market strengthened. The study also found that the effects of policy changes and market fluctuations on impulse responses at specific time points differed even in countries with different systems. The findings of this paper provide valuable insights for policymakers to address the challenges and opportunities brought on by FinTech.

• finance development ,
• TVP-SV-VAR ,
• supply-demand relationship

Citation: Zekai Tu, Runze Yang, Cunyi Yang. Dynamics between FinTech and financial market: Supply-driven or Demand-guided?[J]. Quantitative Finance and Economics, 2024, 8(4): 658-677. doi: 10.3934/QFE.2024025

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• © 2024 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License ( http://creativecommons.org/licenses/by/4.0 )

通讯作者: 陈斌, [email protected]

沈阳化工大学材料科学与工程学院 沈阳 110142

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• Figure 1. Variable trends and volatility (China)
• Figure 2. Variable trends and volatility (USA)
• Figure 3. Sample autocorrelation coefficients, paths, and posterior distribution (China)
• Figure 4. Sample autocorrelation coefficients, paths, and posterior distribution (USA)
• Figure 5. Equal interval pulse response diagram (China)
• Figure 6. Three-dimensional impulse response diagram of the impact of FinTech on finance (China)
• Figure 7. Three-dimensional impulse response diagram of the impact of finance on FinTech (China)
• Figure 8. Equal interval pulse response diagram (USA)
• Figure 9. Three-dimensional impulse response diagram of the impact of financial technology on finance (USA)
• Figure 10. Three-dimensional impulse response diagram of the impact of finance on FinTech (USA)
• Figure 11. Time-point pulse response diagram (China)
• Figure 12. Time-point pulse response diagram (U.S.)

How To Keep Up with Demand for Supply Chain Professionals

The popularity of supply chain and information systems programmes has grown significantly since 2020.

Professors across the country point to the pandemic as a catalyst for students' curiosity about how products move from factories to store shelves and the intricacies of the process.

Four years after the start of the COVID pandemic, its effects are still shaping decisions and outlooks, particularly among teenagers who experienced a disrupted high school education.

While the pandemic hit the elderly and vulnerable hardest, its wider impact stretched to high school students who endured virtual classrooms, economic upheaval and a new awareness of supply chain issues .

While a shortage of baby formula or toilet paper may not have been life-altering for teenagers, these events opened their eyes to the vulnerabilities in global supply chains.

This realisation, even within a country like the United States has left a lasting impression, increasing desire to understand the systems behind daily products.

Now, universities such as the University of Tennessee, Penn State, Georgia Tech and Michigan State have responded to this shift by expanding their supply chain programmes.

More students are enrolling, bringing with them real-life experiences and a deep curiosity about the mechanics of global logistics.

These young minds are driving innovation and pushing for improvements in the field.

Universities respond to demand

The University of Tennessee, for example, has seen its largest cohort of supply chain management students, with 2,000 students enrolled in its undergraduate and graduate programmes.

This surge in enrolment would have been unheard of just a decade ago.

Other universities, like Old Dominion University, have launched new supply chain programmes to meet this rising demand. Old Dominion's School of Supply Chain, Logistics and Maritime Operations is one of the latest examples of institutions adapting to market needs. Meanwhile, Concordia College and Virginia Commonwealth University are also setting up their own supply chain management bachelor’s degrees.

This isn’t just a passing trend. The US Bureau of Labour Statistics projects an 18% growth in logistics jobs over the next decade, significantly outpacing the 3% average growth across all industries.

Universities are taking note of this, expanding their course offerings to meet both student demand and employer needs.

Preparing for the future of supply chain

Whether the momentum behind these programmes will continue remains to be seen.

According to Tom Derry, CEO of the Institute for Supply Management (ISM): “The supply chain profession is becoming increasingly attractive to young professionals who see it as a pathway to the C-suite.”

The market for supply chain analytics is expected to nearly triple, growing from US$5.2bn in 2022 to US$13.5bn by 2027. The global supply chain management application market is also projected to reach almost US$31bn by 2026.

The supply chain field offers a unique set of challenges and opportunities.

It’s a discipline where professionals can see the tangible results of their work, directly impacting a company’s performance. From procurement to logistics to demand planning, the variety of roles means there’s something for everyone. On top of that, the global nature of supply chains presents opportunities for international exposure and career growth.

As companies expand globally, the demand for skilled supply chain professionals continues to rise.

"The evolving nature of supply chain management, coupled with the increasing demand for skilled professionals, translate into huge opportunities awaiting those who embark on a career in the field," comments Daniel Stanton (also known as Mr Supply Chain ).

"Armed with the right education, skills and industry insights, students can navigate the complex and exciting world of supply chain management with confidence."

There's a growing need for those who can navigate the complexities of international trade and logistics while also integrating new technologies into their operations.

It is therefore clear that supply chain professionals will be crucial in keeping companies competitive in an ever-changing market.

Check out the latest edition of  Supply Chain Digital  and sign up to our global conference series –  Procurement and Supply Chain LIVE 2025 . 

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A team of dairy analysts from Rabobank took to the stage at World Dairy Expo in Madison, Wisconsin, to provide insights on milk production and demand in the world’s largest dairy regions. They included (left to right): Mary Ledman, global dairy specialist; Lucas Fuess, North America; Daniëlle Duijndam, Netherlands; Michael Harvey, Australia; Emma Higgins, New Zealand; Andrés Padilla, Brazil; and Michelle Huang, China. Photo by Karen Lee.

Supply and demand expectations for the top 5 global dairy regions

The u.s., europe, oceania, south america and china make up over 80% of global dairy trade. some of these regions are poised to grow in milk production to meet the world's growing demand for dairy..

At a 2024 World Dairy Expo breakfast event, Rabobank’s global dairy analysts provided an overview of the major dairy regions across the world in terms of their milk production capabilities and trade outlook.

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Mary Ledman, global dairy strategist, said Europe accounts for 30% of global dairy trade. New Zealand and Australia provide another 30%. The U.S. is half that at 15%. Along with South America, these regions make up over 80% of global dairy trade.

Over the last three years, milk production in these regions has not grown. “We've seen growth in these areas at less than three-tenths of a percent – a fraction of the growth that they experienced in the last decade,” Ledman said. “Still, the world market has been supplied by enough milk, and that's largely because of the transformation that China has experienced in the last five years.”

China moved from 70% to 85% self-sufficiency, which had a domino effect on global dairy markets. But now that the farmgate milk price in China is starting to fall, that growth in production is expected to slow down.

Over the next 10 years, global demand for dairy is expected to grow from 95 million metric tons (MMT) to 115 MMT. Declining milk production in the European Union and Oceania (Australia and New Zealand) regions is expected to be met by production increases in the U.S. and South America to maintain the current milk supply over the next decade. That means a 20 MMT opportunity still exists to fulfill anticipated global consumer demand.

Milk production:

2023 vs. 2011: +14 mmt, 2023 vs. 2035: +19 mmt.

Lucas Fuess, senior dairy analyst for North America, noted it is exceptionally rare to see a stagnation in U.S. milk production as we have experienced over the past three years. While there is constant volatility in milk prices, one of the steadiest charts in all of U.S. agriculture is milk production growth. This can be mostly attributed to improvements in milk per cow, driven primarily by genetics.

The U.S. is at a multiyear low in cow numbers, but those numbers tend to only swing by about 150,000 from high to low. Fuess said, “While cow numbers matter on a year-to-year basis, when we think about long-term growth and future growth in the U.S., we're thinking about yield primarily.”

Looking to the future, he estimated a 1.5% increase per year in milk production growth. There are bright spots on the horizon, he said, noting Class III milk prices over the past couple of months have risen, and when coupled with margin recovery, a return to profitability should bring a return to milk production growth.

2023 vs. 2011: +16 MMT

2023 vs. 2035: -10 mmt.

With the removal of the EU milk quota in 2015, milk production in the region has grown quite a lot in the last decade, reported Daniëlle Duijndam, dairy analyst in the Netherlands. In addition to the major milk-producing countries ramping up production, Ireland shifted from beef to dairy, and Poland increased in milk per cow, allowing both countries to contribute a lot more milk to the EU milk pool.

Like the U.S., milk production in Europe has been at a standstill for the last couple of years. However, Duijndam said, “Looking forward, we expect European milk production to decline.”

Dairies are facing challenges in farm succession and labor. They are also concerned about the European Green Deal that sets strict targets on climate, biodiversity, water and animal welfare. Extra measures can also be taken on a national level as member states have the ability to enact stricter legislation on matters that are important to them.

“For example, the country I'm from, the Netherlands, we're facing quite strict regulation on nitrogen and water quality. We even have buyout programs from the government to get part of the herd – I’m talking about dairy, pork, poultry and veal – to remove the number of livestock in general,” Duijndam explained.

2023 vs. 2011: -0.3 MMT

2023 vs. 2035: -0.4 mmt.

A consecutive-year drought coupled with a shift from irrigated crops for dairy feed to permanent crops such as almonds, citrus and grapes, has led to a drop in Australia’s milk production. Drought relief came in 2023, but the industry remains challenged by low confidence levels, loss of equity and labor supply. Michael Harvey, senior analyst for dairy and consumer foods in Australia, said the margins for farmers are pretty good right now and the industry is starting to stabilize, resulting in some growth in milk production (about 1%-3%)

When compared to other countries, Australia is a much smaller milk producer, but in exporting 30% of its milk supply, the country is very integrated with the global market. It is also a large importer of European cheese and butter and U.S. cheese for industrial use and the food service sector. The manufacturing footprint in Australia is moving away from ingredients such as milk powders and butter to focus more on cheese to fulfill the domestic market and growing export demand for cheese in Southeast Asia and China.

New Zealand makes up the largest portion of the milk supply in the Oceania region and 25% of the global dairy trade, noted Emma Higgins, senior analyst for agriculture in New Zealand.

A largely grass-based production system, milk production relies on good weather, which can be quite variable for this island country. Following big growth to the dairy herd and high farmgate prices in 2013-14, milk production is now tapering as the industry is challenged by the weather, environmental regulations and access to water. “We're looking at an environment where we're likely to see fewer hooves on farm, and the challenge will be whether or not we can invest consistently to continue to see those higher yields come through,” Higgins said.

South America

2023 vs. 2011: +2 mmt, 2023 vs. 2035: +5 mmt.

As one of the largest countries in the world, Brazil is a global superpower in agribusinesses such as corn, soybeans, beef, poultry, sugar, ethanol, oranges, and pulp and paper products, but not dairy. Andrés Padilla, senior analyst for beverages, dairy, and food and agribusiness supply chains sectors in Brazil and South America, cites two reasons why dairy is not a top commodity for Brazil. First, trade agreements allow Brazil to import dairy products at no cost from other South American countries, so it imports dairy from Argentina and Uruguay. Plus, the success of the other commodities has drawn investment interest over dairy.

The Brazilian dairy industry produces one-third the amount of milk produced in the U.S. but from 10 times more farms. “That's starting to change because the average dairy farm is starting to get bigger,” Padilla said. “The productivity is increasing, and that really means that we're going to start to see some additional growth in our milk production in coming years.”

Farmers looking to be more efficient are investing in more genetics to be able to grow more, be more competitive and fill the country’s love of dairy products.

Argentina has been challenged by macroeconomic instability, inflation and a lack of logistics in some regions, but Padilla said he thinks their dairy industry will start to grow again.

“I think it's a region that has a lot of potential in the world, but for now, it's a region that only contributes 5% to global dairy trade. As I said before, most of the excess milk that Argentina and Uruguay produce ends up being consumed in Brazil,” Padilla said.

2023 vs. 2011: +11 MMT

2023 vs. 2035: +8 mmt.

China is the world’s largest uptaker of milk and dairy products, but recent domestic challenges have lessened its need for these products. Michelle Huang, dairy analyst in China, said she anticipates import volume to be down by 12% this year and the trend will continue into 2025.

“The reason for the declining import volume is largely caused by an oversupply situation together with a weaker domestic demand for dairy consumption,” Huang said.

The oversupply has lowered the milk price farmers receive. Along with elevated feed costs in China, small- to medium-sized farms (100 cows or less) are going out of business, larger farms are feeling the pressure and culling cows, and farm consolidation is occurring. With fewer dairy herds, Huang said she expects production to decline slightly in the next few years.

Longer term, China lacks natural resources and faces a high cost of production with feed costs at 70% of the cost to produce milk. When neighboring countries, such as New Zealand, can make milk cheaper, it’s not economical to have all the country’s milk domestically produced.

Huang said there is potential for the Chinese to consume more dairy products, but it will be more like 2% growth – less than the 6% annual growth from the past decade. She also thinks there will be a shift from volume to value growth as consumers will look for more butter and cheese than ingredient products.

“A key message I want to deliver here is that China will continue to be an import country for dairy products, but the level of import volume will be much less than the peak time in 2021,” she said.

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Copper market outlook: supply deficits and demand fuel record prices

By  CPM Group

Kitco commentaries opinions, ideas and markets talk.

Featuring views and opinions written by market professionals, not staff journalists.

In this presentation, Jeffrey Christian of CPM Group, provides an in-depth at the copper market's current state and future prospects. Jeff discusses copper's "bright futures" both in the short and long term.  Jeff also looks at some the factors influencing copper demand, including the energy transition and electrification efforts that require significant copper usage.  He discusses the potential for supply constraints caused by a lack of new mining projects and regulatory hurdles.  The video concludes with a discussion of China's role in the copper market, and CPM Group's projections for the metal over the next few years

CPM Group is a commodities research, consulting, financialadvisory and commodities management firm providing independent research,analysis and advisory services related to commodities markets, corporate andproject finance, and the financial management of exposure to commodity orientedinvestments.

We started our business in 1986 predicated on the idea that commoditiesresearch and advice is best delivered by independent experts who do not work forbanks, brokers, mining companies, or any other entity that has interests thatcould conflict with the best interests of the clients receiving the research,analysis, and advice.

All of our work is driven by fundamental commodities research and economicanalysis. As we undertake our research into individual commodities markets wegather a tremendous amount of information and develop an enormous body ofextremely high quality, unbiased analysis of the markets and the companies thatare involved with individual commodities. The outputs of our research andanalysis take the form of research reports, specialized and targeted consultingrelated to these markets, financial advisory services ranging from corporate andproject finance structuring to equity introductions, and managing specificcommodities and investment positions for clients.

CPM Group continues to demonstrate the economic value and financial worth ofsuperior research, information, and analysis. Our research is based onmicro-economic analysis of the individual components of each commodity market,wedded with a top-down macro-economic analysis of the global trends affectingthese markets. We apply the results of that analysis to our research,consulting, and advisory services.

Eastern Corridor demand driving growth in industrial land market

PUBLISHED : 22 Oct 2024 at 08:31

NEWSPAPER SECTION: Business

WRITER: Kanana Katharangsiporn

The serviced industrial land market in the first half of 2024 experienced growth across the board, with increases in new supply, land sales, sales rates and asking prices, primarily driven by demand in the Eastern Economic Corridor (EEC).

Marcus Burtenshaw, executive director and head of occupier strategy and solutions at property consultant Knight Frank Thailand, said the first half of 2024 showed a strong, sustained demand for serviced industrial land in Thailand, particularly in the EEC.

"This trend underscores Thailand's growing appeal as a hub for high-value, technology-driven industries," he said. "With investments from both local and international players, coupled with government incentives, the growth in this sector is expected to continue."

Knight Frank Thailand reported that 8,063 rai of serviced industrial land was sold or leased nationwide in the first half of 2024, a surge of 53% compared to the second half of 2023.

New supply added only 886 rai, bringing the total supply to 181,280 rai, an increase of just 0.5%.

The surge in demand along with a slight increase in new supply pushed the cumulative sales rate to 86.9% in the first half of 2024, a 3.9% rise from the previous period.

The key driver was the EEC, where 4,869 rai of land was transacted, representing 60% of the total transactions nationwide. Strategic locations in the EEC, supported by government incentives, were a significant factor in this growth.

Mr Burtenshaw said the first half of 2024 showed a strong, sustained demand for serviced industrial land.

Strong transactions were also seen in other areas, particularly in the central region and eastern provinces outside the EEC, including Prachin Buri and Sa Kaeo, along with Chanthaburi and Trat, where 1,297 rai and 1,274 rai of land was sold or leased, respectively.

The average asking price for serviced industrial land nationwide rose by 1.6% to 6.2 million baht per rai, up from 6 million baht per rai in the second half of 2023.

The highest average asking prices were recorded in Greater Bangkok, at 11.1 million baht per rai, marking a 2.2% increase. The peak price was observed in the Gemopolis Industrial Estate in Samut Prakan, reaching up to 16 million baht per rai.

The second-highest average price was in the EEC, at 6.7 million baht per rai, up 1.2%. Areas within the EEC also had the widest range of asking prices, ranging from 3.6 million to 12 million baht per rai.

Prices were notably higher along Motorway Route 7 (Bangkok-Ban Chang), followed by areas near the ports of Laem Chabang and Map Ta Phut, where improved infrastructure and accessibility drove increased demand.

In contrast, the Northeast had the lowest asking prices, starting from 2.2 million baht per rai, with the average asking price remaining unchanged from the second half of 2023 at 2.9 million baht per rai.

According to the Board of Investment, total investment promotion approvals in the first half of 2024 surged 37% year-on-year to 1,451 projects, with a 27% increase in investment value, reaching 476 billion baht.

Foreign direct investment drove much of this growth, accounting for 63% of the projects and 76% of the investment value.

China led with 329 projects worth 101.7 billion baht, followed by Singapore and Japan.

The electrical appliances and electronics sector attracted the most investment, with 170 projects worth 139 billion baht.

• Eastern Corridor

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