What's driving food prices?

by Editor fleischwirtschaft.com
Wednesday, August 06, 2008

Understanding the complex and multiple factors influencing food prices today is important as future policy options are debated, according to a new study released by Farm Foundation.

"Today’s food price levels are the result of complex interactions among multiple factors. However, one simple fact stands out: economic growth and rising human aspirations are putting greater pressure on the global resource base", says Farm Foundation President Neilson Conklin.

Written by Purdue University economists Wallace Tyner, Christopher Hurt and Philip Abbott, the study, What’s Driving Food Prices?, identifies three broad sets of forces driving food price increases: global changes in production and consumption of key commodities, the depreciation of the U.S. dollar, and growth in the production of biofuels.

"We made no attempt to calculate what percentage of price changes are attributable to the many disparate causes and, in fact, think it is impossible to do so", says Tyner, the lead author of the report. Tyner is an energy and policy economist, most recently specializing in biofuels policies. Hurt works in analysis of commodity markets and Abbott in international trade and macro factors.

The authors reviewed current reports and studies, considering the findings of that literature as they did their own analysis of the situation.

"We commissioned this report to provide a comprehensive, objective assessment of the forces driving food prices", Conklin said. Find further information under: www.farmfoundation.org