In 2008, food prices throughout the U.S. and the world rose significantly. The similar trend in 2011 has been well-documented in many reports and news stories. That said, a new report issued from Farm Foundation, NFP explains that "while some of the same factors that drove commodity and food price increases in 2008 are at work today, new and very different factors have also emerged."
The new report titled, What's Driving Food Prices in 2011? can be accessed here. Five key factors are identified in the report:
- Persistent demand shocks--specifically demands of the biofuels industry, particularly for corn, and China's decision to import huge quantities of soybeans due to income growth and stocks-building;
- Market inelasticity;
- Weather and grain stocks;
- Chinese policies; and
- Macroeconomis, specifically a weaker U.S. dollar.
For more information about the report, contact Neil Conklin at neil@farmfoundation.org, Wallance Tyner (Purdue University) at wtyner@purdue.edu, or Mary Thompson at mary@farmfoudnation.org or 630-571-9393.
Posted July 20, 2011
