Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices

Ronald Trostle

No 413173, Miscellaneous Publications from United States Department of Agriculture, Economic Research Service

Abstract: World market prices for major food commodities such as grains and vegetable oils have risen sharply to historic highs of more than 60 percent above levels just 2 years ago. Many factors have contributed to the runup in food commodity prices. Some factors reflect trends of slower growth in production and more rapid growth in demand that have contributed to a tightening of world balances of grains and oilseeds over the last decade. Recent factors that have further tightened world markets include increased global demand for biofuels feedstocks and adverse weather conditions in 2006 and 2007 in some major grain- and oilseed-producing areas. Other factors that have added to global food commodity price inflation include the declining value of the U.S. dollar, rising energy prices, increasing agricultural costs of production, growing foreign exchange holdings by major food-importing countries, and policies adopted recently by some exporting and importing countries to mitigate their own food price inflation. This report discusses these factors and illustrates how they have contributed to food commodity price increases.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; International Relations/Trade; Livestock Production/Industries; Productivity Analysis; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 30
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersmp:413173

DOI: 10.22004/ag.econ.413173

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