The Von Thunen model depicts how commercial farmers figure out which crops and animals to cultivate based upon the market location. A commercial farmer cultivates land for the purpose of making a profit. Persihability of the product is a key variable as well. A critically variable in this model that these commercial farmers take note of is the cost of land versus the cost of transporting products to markets because their goal is to make a high profit. Transportation cost depends on the distance from the market and the different kind of products. Locational rent is a term used by Von Thunen to explain his theory which is the equivalent to land value.
- Horticulture (market gardens) and Dairy because the products are perishable and need to be close to the city so they will not become spoiled.
- Foresty such as the production of timber and firewood for practical uses such as fuel and building material. They also have to be close to the center because of their weight and transportation issues (weight).
- Extensive fields, such as grains for bread, because they last longer than those in the first ring so they can be farther away from the central market. They are also lighter making it easier for transportation.
- Ranching or grazing is in the outermost ring because they require the most space and farmers can walk/herd animals to market if needed.
Beyond the last ring is land that is too great of a distance to make a profit from the city.
- The model shown here also depicts the fattening and slaughter of animals which would have to be nearby.
Weaknesses of this model:
- The city is located centrally within an "Isolated State."
- The Isolated State is surrounded by wilderness.
- The land is completely flat and has no rivers or mountains. A river might modify the shape of the rings because transportation costs change when products are shipped by water routes rather than over roads.
- Soil quality and climate are consistent.
- Farmers in the Isolated State transport their own goods to market via oxcart, across land, directly to the central city.
- There are no roads.
- Farmers behave rationally to maximize profits.
- Government policies and changes in demand or price of the commodity.
- Von Thunen also did not consider modern technology that had yet to be invented in his time. For example there are refrigerated cars for the transportation of dairy products which make them last longer and travel longer distance. Also there is the transportation of animals by rail which is faster than having them being grazed into the city.