Explain why agricultural demand is unstable.

The major source of demand volatility for U.S. agriculture is from its dependence on world markets. Since about 35 percent of U.S farm output is exported, changes in weather and crop production in other countries will affect export prices. Better crops abroad, cyclical fluctuations in incomes in Europe or Southeast Asia, changes in foreign economic policy, international politics, and changes in the international value of the dollar can all contribute to demand volatility.