Food Prices on the Rise

agricultural loans - food prices
agricultural loans - food prices


According to the U.S. Department of Labor, food prices have reached a thirty year high. The higher prices, caused by a variety of factors, have been felt in the United States. Consumers, naturally, are unhappy with higher food prices, particularly in light of the continued economic decline in the U.S., while farmers are generally pleased with increased revenue.

The causes of the price increases are varied. Inflation, naturally, has played a role in driving up food prices. High fuel costs and the increasing cost of gasoline in the U.S. has also played a major role in raising production costs and driving up the final price for food and agricultural products. Another factor is the U.S.’s increasing use of ethanol. Increased ethanol production leads to less corn being used for general consumption and increased prices.

A significant factor in rising food prices is shifting consumption patterns worldwide. Asian states like China and India have recently seen a rising and increasingly powerful middle class. As developing nations expand their middle class, diets heavily dependent on staple grains tend to give way to diets rich in proteins (as are common in first world states like the U.S.). Increased overseas demand for agricultural products and livestock has helped increase commodity prices at home, driving up food prices.

The rise of the Chinese middle class has led many experts to predict that food prices will remain high in the foreseeable future. With more of the world consuming at first world levels, competition and prices will remain high as surpluses decrease.

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Written by: Justin Ellison / Farm Plus Staff Writer