| Gulp! Food Prices Hard to Swallow |
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| Written by Kiki Hubbard | |
| Tuesday, 29 July 2008 | |
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Food prices have gone up. This is clear. Finding the causes for these increases, however, isn't as simple as looking at the label. But a new report by Purdue University economists at least sheds some light on the issue, identifying three broad sets of forces driving food prices up: 1) Global changes in production and consumption of key commodities. As some countries become more economically developed, diets transition from eating mostly cereals to eating more animal protein, which means global consumption of commodity agriculture products increases. Although China isn't a big trader of these commodities, the country's increased consumption of oil is indirectly affecting food prices by impacting world prices of crude oil. 2) The depreciation of the U.S. dollar. A lot of commodities, including grain, are priced in U.S. dollars but purchased in local currency. There is a link with rising commodity prices and the falling U.S. dollar. The demand for U.S. agricultural commodities goes up when the dollar is low, and the price of oil goes up, too. 3) Growth in the production of biofuels. Certain policies (including subsidies) have led to the biofuel boom. As you probably know, much of the corn demand has been for ethanol. Corn prices have increased for a variety of reasons, including ethanol credits and the Renewable Fuel Standard, but the authors say that "quantitatively most of the increase has been driven by higher oil prices." The authors don't seem too concerned about the changes we're seeing in the marketplace and remind readers that historically commodity prices rise and fall. They say that it's up to policymakers to identify policy options that address the effects of price increases in a way that doesn't create long-term problems. But don't take my word for it. Read the report (opens PDF). Source: Farm Foundation Comments (1)
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It's true what our moms said...we are what we eat. In fact, it's truer than they thought. What I eat doesn't just affect me anymore, it affects all of us.
Unfortunately, the story of food can sometimes be complicated. But envirovores help each other out...which is why this blog will be bringing you news, tips, and information about food and the environment every step of the way.
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did we learn nothing from jimmy carter's vain attempt to reduce poverty by raising the minimum wage 5 times in four years?? look how well that worked then, and convince me it will work any better now.