Olafsdottir, A.H., Gudbrandsdottir, I.Y., Sverdrup, H.U., Olafsdottir, G., Bogason, S.G. (2018) On modelling the price of beef and salmon using a fully dynamic approach.
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This study explains the food market mechanisms and derives price function curves for beef and salmon. The price mechanism model, that is part of the WORLD6 model, we have developed for global commodities like metals and materials that we have now adapted for food makes price endogenous to our integrated system dynamics models for industrial and food supply dynamics. The market mechanism has a number of feedback loops and especially the interplay between market amount, price, demand and profits that drive production and supply has been studied. The mechanism is included in the VALUMICS model for integrated supply-, decision- and value-chains in the food supply system. For the global system, the VALUMICS model will be integrated in the WORLD6 model. The model was preliminary tested on the global level for bulk world market supply of grain and coffee, without involving whole supply chains. The tests show that the obtained price functions follow a pattern earlier discovered for metals and materials. Price curves were determined for beef and salmon