Understanding what factors have affected demand in the past will help to develop expectations about demand in the future and the impact on market price. Demand for a particular product or service represents how much people are willing to purchase at various prices. Thus, demand is a relationship between price and quantity, with all other factors remaining constant. Generally the relationship between price and quantity is negative. This means that the higher is the price level the lower will be the quantity demanded and, conversely, the lower the price the higher will be the quantity demanded.
Market demand is the sum of the demands of all individuals within the marketplace.
Market demand will be affected by other variables in addition to price, such as various value added services including handling, packaging, location, quality control, and financing. Thus the demand for an agricultural commodity is typically derived from the demand for a finished product. It is important for you to understand that a free market economy is driven not by producers but by consumers. Ultimately the market value for any good or service is determined by its value to the consumer. Higher prices mean higher profits and higher profits provide you with the incentive and the means to expand production of those goods and services that consumers value the most.