Farm Products

The agricultural markets are classics as far as seasonality is concerned. Agricultural products are harvested at certain times of the year and are then available in large quantities and thus at lower prices. After that they gradually get more expensive until they are only available for a high price, if at all, depending on storage contingencies.

Seasonality in the agricultural markets is important historically as well. A farmer who because of a bad harvest is unable to store enough seed for planting, must purchase it at a higher price as planting takes place at a time when prices are seasonally very high. If the farmer borrows seed for planting he must pay back even more grain after the harvest. This takes the form of a high rate of interest, but concealed behind it are strongly fluctuating high seasonal prices, because the loan has been received and paid back in kind.

This seasonal horror scenario in the agricultural sector has luckily mostly been eliminated thanks to much improved possibilities for storage and transportation. It can even be said that the regression of seasonal price differences is one of man's biggest achievements, after all reducing seasonal effects as been a goal since the Stone Age. Since SeasonalCharts provides information about seasonality, the webpage works just a little against seasonal effects. In that way SeasonalCharts ultimately contributes to the regression of seasonal price differences. Individual or operational benefits are joined by an economic benefit, for instance in the form of a lessening of a seasonally contingent misallocation. This is comparable to the yearly vacation traffic jams, which cost street capacity, time and nerves because the seasonal dimension is ignored. A seasonal balance would benefit both individuals and society.

The extent of seasonal effects on food availability is still considerable even today. Whether dealing with the agricultural market as producer, dealer, processor, consumer, or in storage, it is possible to benefit from seasonality. It must be remembered that technological advancement continues and affects seasonality, for example through allowing variable harvest times. Traders using futures should be sure to consult seasonal trends in the futures markets.

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