There are three major types of commodities; agriculture, energy, and metals. These three are differentiated in the means of accessing them. The means of accessing them is based on whether they are hard or soft. Hard commodities are obtained from mining using either the open pit or the underground shaft method. The energy and metal commodities can be obtained through these means and classified under the hard commodities. Energy commodities are characterized by renewability where some of them are naturally replenishing but are limited in their availability per unit time.
Metal commodities portray the characteristic of conveyable value, which means that their ownership is transferrable from one owner to another. Conversely, agricultural commodities are obtained by tilling the land and planting crops for harvest and rearing or feeding livestock and are classified as soft commodities. Agricultural commodities are characterized by bulk because they are harvested in plenty. They are also characterized by nature, where if rains do not fall, there is a likelihood of minimal produce because of insufficient water. The common characteristics amongst these commodities are that they depict uniformity from all producers, they are all used in the production process as inputs, and they are natural resources.
Agriculture
Agricultural commodities are categorized into cattle and crops. Cattle are the animals that individuals rear and feed to obtain food products from them. Crops are the products obtained from tilling land and planting to harvesting after a given period. Below is a list of food commodities from both categories.
1. Wheat
2. Soybeans
3. Maize
4. Beans
5. Sugar
6. Hogs
7. Wheat
8. Milk
9. Cotton
10. Coffee
11. Cocoa
12. Mangoes
Agricultural commodities are perishable, meaning that they have a minimal shelf life after being produced or harvested. They have to be frozen in ice in a refrigerator to last longer. The commodities affected by this characteristic are fruits and vegetables. Agricultural commodities are also influenced greatly by nature. For instance, if there are no rains, there cannot be sufficient harvest because of the insufficiency of water to water farm products. These commodities are also characterized by bulk. When harvested or produced, they come in large amounts for supply in the market. For example, when a maize seed is planted, it produces a maize cob with so many of them. Agricultural products are highly essential as they are a source of food for many people. For instance, corn is a staple food in some countries.
Energy
Energy commodities are described as the items that heat and cool structures and fuel moving machines for operational purposes. Examples of these are natural gas, fuel products like propane, diesel, electricity, and methane. Energy commodities have a significant influence on human beings' daily lives. They are essential in the provision of electricity and fuel products. If the prices of these commodities change, they affect the prices of all other commodities because they affect their supply and demand hence affecting their prices. Therefore, energy commodities are deemed a primary driver of the economy's progress because they technically fuel it. When the prices of fuel products or generally energy commodities rise, other goods in the economy also experience an upswing in prices and vice versa. Basically, changes in the prices of energy commodities translate to similar changes in other goods in the economy.
Metals
Metals are extracted or obtained by mining. They are valuable commodities that have not been created into products yet but exist in their basic and raw form. Metal commodities are a reliable investment, and they have a conveyable value. They are deemed reliable because they are predicted to have good returns when invested. The conveyable value in metal commodities means that their ownership can be transferred from one individual or corporation to another. Examples of these commodities are gold, copper, silver, steel, zinc, and aluminum. Metal commodities are essential since they are very valuable. These metals are used to make electronics, make coins, conduct investments, make jewelry, and art.
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FAQs
Commodities are often split into two broad categories: hard and soft commodities. Hard commodities include natural resources that must be mined or extracted, such as gold, rubber, and oil, while soft commodities are agricultural products or livestock, such as corn, wheat, coffee, sugar, soybeans, and pork.
What are examples of a commodity? ›
Commodities include agricultural products such as wheat and cattle, energy products such as oil and natural gas, and metals such as gold, silver and aluminum. There are also “soft” commodities, or those that cannot be stored for long periods of time, which include sugar, cotton, cocoa and coffee.
What is a commodity answer? ›
Commodities are basic goods and materials that are widely used and are not meaningfully differentiated from one another. Examples of commodities include barrels of oils, bushels of wheat, or megawatt-hours of electricity.
What are the 20 food commodities? ›
- GRAND TOTAL.
- VEGETABLE PRODUCTS.
- CEREALS (EXCLUDING BEER) WHEAT. RICE (MILLED EQUIV.) BARLEY. MAIZE. RYE. ...
- STARCHY ROOTS. POTATOES. SWEET POTATOES. CASSAVA. YAMS. ROOTS, OTHER.
- SUGAR CROPS. SUGAR CANE. SUGAR BEET.
- SWEETENERS. SUGAR NON-CENTRIFUGAL. SUGAR (RAW EQUIVALENT) SWEETENERS, NES. HONEY.
- PULSES. BEANS. PEAS. PULSES, OTHER.
- TREE NUTS.
Three of the most commonly traded commodities include oil, gold, and base metals.
What are the most common commodities? ›
Common tradable commodities include crude oil, wheat, soybeans, gold, silver, livestock, coffee, sugar, cotton, corn, frozen orange juice, and natural gas.
What is a commodity and give 5 examples? ›
They are metal, energy, and agricultural commodities. Metal commodities examples are gold, silver, and copper. Agricultural commodities include rice, wheat, corn, beef, pork, beans, and cotton.
What are basic goods commodities? ›
Most commodities are raw materials, basic resources, agricultural, or mining products, such as iron ore, sugar, or grains like rice and wheat. Commodities can also be mass-produced unspecialized products such as chemicals and computer memory. Popular commodities include crude oil, corn, and gold.
What is the difference between a product and a commodity? ›
A commodity often refers to a raw material used to manufacture finished goods. A product, on the other hand, is the finished good sold to consumers. Both commodities and products are part of the production and manufacturing process; the main difference being where they are in the chain.
What type of commodity is meat? ›
In commodity markets, animals and animal products are classified as soft commodities, along with goods such as coffee and sugar, because they are grown, as opposed to hard commodities, such as gold and copper, which are mined.
Commodity refers to an object or item of an economic good or service. It is freely exchangeable in the market, usually known as the commodity market or spot market. An essential aspect of a commodity is that an item called as a commodity is common among its kind and cannot be differentiated.
What does commodity mean for kids? ›
A commodity is, generally speaking, any product that is bought or sold. The word has also come to refer specifically to agricultural products and raw materials that are vital to the world's economy.
Are eggs considered a commodity? ›
The term “commodity” means wheat, cotton, rice, corn, oats, barley, rye, flaxseed, grain sorghums, mill feeds, butter, eggs, Solanum tuberosum (Irish potatoes), wool, wool tops, fats and oils (including lard, tallow, cottonseed oil, peanut oil, soybean oil, and all other fats and oils), cottonseed meal, cottonseed, ...
What are 10 commodities? ›
The 10 largest sources of cash receipts from the sale of U.S.-produced farm commodities in calendar year 2022 are (in descending order): corn, cattle/calves, soybeans, dairy products/milk, broilers, hogs, miscellaneous crops, chicken eggs, wheat, and hay.
What vegetables are commodities? ›
Vegetables Imports/Exports
- Artichokes.
- Asparagus.
- Beets.
- Broccoli.
- Brussel sprouts.
- Cabbage.
- Carrots.
- Cauliflower.
Final answer: COOL covered commodities are those that require labeling with their country of origin. The 7 commodities that apply are Wild-caught salmon, Farm-raised trout, Lamb, Chicken, Pork, Shrimp, and Beef.
What are the 2 main types of commodities? ›
A commodity is categorized into three basic classifications. They are metal, energy, and agricultural commodities. Metal commodities examples are gold, silver, and copper. Agricultural commodities include rice, wheat, corn, beef, pork, beans, and cotton.
What are 4 examples of commodity money? ›
Historically, examples of commodity money include gold, silver, tea, alcohol, and seashells. Even if no one would accept such goods as trade, the owners could still use them for their purposes.
