Good news for broccoli lovers

The New Zealand Herald reported yesterday:

New Zealand broccoli lovers are in for a treat, as a “phenomenal” season has resulted in great prices for consumers.

According to the latest Stats NZ Food Price Index, the price of broccoli dropped 32.3 per cent in April compared to the same month last year.

Foodstuffs North Island’s head of butchery and produce Brigit Corson said this time a year ago, fresh produce was at the mercy of extreme weather events which wreaked havoc for many growers, but good weather had since turned this around.

“Right now, we’re seeing great supply for produce like broccoli because we’ve had months of fantastic weather, making for near-perfect growing and planting conditions.”

Corson said the price of fresh produce depended on a few different factors, including if it was in season, the growing conditions and whether it was in abundance.

“If there’s been a bumper crop and great supply, that’s when the prices go down.”

It is easy to see why the price of broccoli has decreased, using the model of supply and demand, as shown in the diagram below. Last year, when the conditions for growing broccoli were not good, the supply was S0, and demand was D0. The equilibrium price of broccoli was P0, and the equilibrium quantity of broccoli traded was Q0. This year, with better growing conditions, the supply of broccoli has increased to S1. Another way of thinking about this is that, at each and every price, more broccoli would be supplied, shifting the supply curve out to the right (to S1). The result is that the equilibrium price of broccoli decreases to P1, and the equilibrium quantity of broccoli traded increases to Q1.

Overall, good news for broccoli lovers, and easily anticipated using the model of supply and demand.