4 ms·

I never understood what the reason was for the recent spike in food prices. Does anyone here know of a good study that explains this?

anamax 18y ago
It was a combination of the spike in gasoline/diesel prices, a diversion of corn to make ethanol, which pushed up the price of everything that depended on corn (meat being a big one), and a shift to more corn production (which reduced the production of other things, increasing their price). The US subsidizes domestic ethanol production and heavily taxes imported ethanol. Brazil produces ethanol far more efficiently than Iowa does. For those playing at home, that's a govt failure.
- trapper 18y ago
  Ummm... does meat really depend on corn?
  - mythogen 18y ago
    Yes. At least in the US, I believe, feed for a variety of meat animals is often composed heavily of corn. Ask your local rancher about this. Price of cow food goes up; price of tasty cow bits goes up.
    - trapper 18y ago
      Ahh, I hail from a grass fed country.
richcollins 18y ago
I'm guessing it was inflation. There wasn't a food shortage, but everyone's money was becoming worthless. Now that the banks stopped lending, deflation is giving their money value again.
bootload 18y ago
"... I never understood what the reason was for the recent spike in food prices ..." Increases in population, the inability to feed it's own population and the drop in global rice production has caused increased rice prices in Philippines. The Philippines is now totally dependent on rice imports. Increased grain prices are certainly the result of complex combination of increased demand for wheat, the price of oil, introduction of competing bio-fuels ~ http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:21727859~menuPK:258657~pagePK:2865106~piPK:2865128~theSitePK:258644,00.html http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT... "... Does anyone here know of a good study that explains this? ..." The world bank has a good set of reports ~ http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,print:Y~isCURL:Y~contentMDK:21665883~pagePK:64165401~piPK:64165026~theSitePK:469372,00.html http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,print:Y~... there is also a wikipedia link ~ http://en.wikipedia.org/wiki/Food_crisis http://en.wikipedia.org/wiki/Food_crisis

anamax 18y ago

It was a combination of the spike in gasoline/diesel prices, a diversion of corn to make ethanol, which pushed up the price of everything that depended on corn (meat being a big one), and a shift to more corn production (which reduced the production of other things, increasing their price). The US subsidizes domestic ethanol production and heavily taxes imported ethanol. Brazil produces ethanol far more efficiently than Iowa does. For those playing at home, that's a govt failure.

trapper 18y ago
Ummm... does meat really depend on corn?
- mythogen 18y ago
  Yes. At least in the US, I believe, feed for a variety of meat animals is often composed heavily of corn. Ask your local rancher about this. Price of cow food goes up; price of tasty cow bits goes up.
  - trapper 18y ago
    Ahh, I hail from a grass fed country.

richcollins 18y ago

I'm guessing it was inflation. There wasn't a food shortage, but everyone's money was becoming worthless. Now that the banks stopped lending, deflation is giving their money value again.

bootload 18y ago

"... I never understood what the reason was for the recent spike in food prices ..." Increases in population, the inability to feed it's own population and the drop in global rice production has caused increased rice prices in Philippines. The Philippines is now totally dependent on rice imports. Increased grain prices are certainly the result of complex combination of increased demand for wheat, the price of oil, introduction of competing bio-fuels ~ http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:21727859~menuPK:258657~pagePK:2865106~piPK:2865128~theSitePK:258644,00.html http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT... "... Does anyone here know of a good study that explains this? ..." The world bank has a good set of reports ~ http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,print:Y~isCURL:Y~contentMDK:21665883~pagePK:64165401~piPK:64165026~theSitePK:469372,00.html http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/0,,print:Y~... there is also a wikipedia link ~ http://en.wikipedia.org/wiki/Food_crisis http://en.wikipedia.org/wiki/Food_crisis