Honey prices are on the rise. The reason why is a fun one for an economics class. Not one, but TWO things, are happening simultaneously. Both are reinforcing the increase in price.
First, people want more honey. Why is that? Well, there is an increased desire for substitutes to traditional raw sugar and corn syrup. Honey is believed to be healthier, so people want it.
What does this mean when we draw our supply and demand graphs? It means that at every price, more people are wanting to buy honey, so the demand curve is shifting to the right. This in-and-of itself should increase the price. At the previous price, more people would be willing to buy honey than suppliers are incentivized to provide. This tension causes the price to rise until the price such that consumers want to pay for a given quantity is the same that producers are willing to accept to supply that amount.
The second factor affecting honey prices is a decrease in supply of bees. Why? Well people aren’t quite sure, but there seems to be a disease killing populations of bees.
Ignoring the increase in desire for honey (demand) previously discussed, what does this do to our curves? At any given price, there is less honey supplied (supply shifts to the left). So, at the previous price, more people would want honey than firms are supplying. This pressure (same as before) causes the price to rise.
Now, instead of each happening independently, we have them simultaneously occurring! The increase in demand causes the price to rise. The decrease the bees, causes the price to rise. Both together – the prices are really increasing!
What happens to the quantity sold? That’s not a simple one that our supply and demand graphs can show us. At least in the U.S. the quantity has increased, so the shift in demand must be outweighing the decrease in production.
For more detailed information on this issue, check out this great article from the Wall Street Journal “You’ll Need a lot More Money to Buy that Jar of Honey.” Maybe assign it to your students and have them draw out what is happening in the market for honey! https://www.wsj.com/articles/youll-need-a-lot-more-money-to-buy-that-jar-of-honey-11558526402
Yogurt with Honey
I recently spent some time in Greece, and I asked some Greeks what their favorite Greek dessert was. Surprisingly to me, on multiple occasions I got the following answer: yogurt with honey (and sometimes nuts).
“Really?! I eat that for breakfast” was my usual response.
Fortunately for me and my love of baking, when I ask that question in the U.S. I get much different answers. But, for now, here is the “best” Greek dessert.
Scoop some Greek yogurt in a bowl. Add some honey (to your desired level of sweetness). Here is another good time to use some economics - or recognize that you are already using it - you want to add enough honey to your yogurt so that the marginal benefit of the honey just equals the marginal cost of adding that honey. Any less honey and you would not be maximizing your enjoyment; any more and your enjoyment from honey is decreasing. Refer back to this lesson on marginal benefit and marginal cost for more!
Sprinkle on some walnuts (optional). Close your eyes and pretend you are looking out at the beautiful blue Mediterranean.
*What is Greek yogurt exactly? It is just strained regular yogurt. By straining it, you reduce some of the whey (liquid) and you get a thicker yogurt.
Actually, making yogurt isn’t that hard, and it only requires two ingredients: yogurt and milk. I made my own yogurt for a couple of years, and then just gave up and started buying store-bought yogurt again. But, if you’re looking to try something new, check out Pioneer Woman’s instructions on making yogurt.