As of June 29th the Drought Monitor showed only some abnormally dry conditions in North Central and parts of South Central/Southeast Kansas. It’s a pretty good bet after this week those spotty dry conditions are likely gone. The six to ten-day outlook (July 6 to July 10) indicates normal temperatures and slightly above normal precipitation for our area. Not great for wheat harvest remaining but good news for summer row crops in our area. Besides the wheat harvest, the biggest drawback across the state has been flooding is certain areas. The eight to 14-day outlook (July 8 to July 14) indicates above normal temperatures and below normal precipitation.

One of the big topics in agriculture today is termed “market transparency” in the cattle industry. In plain language, a market is transparent if much is known by many or essentially everyone, buyer and seller has access to all the pertinent information. This topic is one where producer and agricultural groups along with both Democratic and Republican legislators are working together. A topic where many in the livestock community actually want government regulation. So what are we talking about here? Before we delve into the specifics next week, a bit of background is in order first. Why does market transparency matter?

We work under the premise that our economy is essentially a free market economy and in agriculture, producers are working under “perfect competition.” So what does that mean? Let’s briefly define what’s important here and next week the concern this legislation seeks to address.

There are four principles under perfect competition.

Numerous buyers and sellers which means no one or two buyers or sellers can set affect the price.

Homogenous product denoting that the product of one producer can’t be distinguished from another’s.

Freedom of entry and exit allows producers to enter or exit the market without an undue burden or challenge.

Perfect Information – this starts getting to the heart of the concern. Buyers and sellers have access to all necessary information. There aren’t secrets that some can benefit from by denying others access.  

The Laws of Supply and Demand – simply put the supply available of a product will increase as the price increases. Demand will decrease as price increases. The amount supply and demand will change is a function of many factors. When a market is working properly, an equilibrium price is reached where buyers and sellers are both doing the best they can under the circumstances. This is done in the marketplace where both sides come together and an equilibrium price is determined. Yes, there are a variety of factors that can change the equilibrium price.

Suppliers of a product under perfect competition are “price takers.” They can accept or reject a price but have no real ability to set a price.

With this background, next week we will discuss what the concern being raised is all about and why producers are so concerned.

Dr. Victor L. Martin is the agriculture instructor/coordinator for Barton Community College. He can be reached at 620-792-9207, ext. 207, or martinv@bartonccc.edu.