These factors include prices for commodities, cost of inputs, government policies such as trade agreements, government programs such as price supports or Commodity Credit Corporation loans, fiscal and monetary policies, technological advances, and many others. The worksheet offers a space for you to document your thoughts and future expectations about the external factors that impact your family and farm business. Market Forces Impacting Farm Businesses Changing commodity prices and input costs are of great concern to farmers. In this step however, you are urged to think more broadly and also describe the impact that a change in consumer preferences, industrial products, technology change, and macroeconomics policy will have on your business. These issues affect the business because they can impact the price received at the market or the cost of producing the commodity.
Farmers are probably most familiar with prices for inputs they use and commodities they produce.
Knowing and understanding the determinants of these prices can help farmers decide which enterprises to include in the business plan. These three influences help to explain price variability. Trend variations are the overall direction of prices in the long run. They can increase, decrease, or remain flat. Cyclical variations are the price cycle that commodities experience during a several year time period.