Food prices

Food pricesrefer to the averageprice levelforfoodacross countries, regions and on a global scale.Foodprices affect producers and consumers of food. Price levels depend on thefood productionprocess, includingfood marketingandfood distribution. Fluctuation in food prices is determined by a number of compounding factors.Geopolitical events, global demand, exchange rates,government policy, diseases andcrop yield, energy costs, availability of natural resources for agriculture,food speculation,changes in the use of soil and weather events directly affect food prices.To a certain extent, adverse price trends can be counteracted byfood politics.
The consequences of food price fluctuation are multiple. Increases in food prices, oragflation, endangersfood security, particularly fordeveloping countries, and can cause social unrest.Increases in food prices is related to disparities in diet quality and health,particularly among vulnerable populations, such as women and children.
Food prices will on average continue to rise due to a variety of reasons. Growingworld populationwill put more pressure on thesupply and demand.Climate changewill increaseextreme weatherevents, including droughts, storms and heavy rain, and overall increases in temperature will affect food production.
An intervention to reduce food loss or waste, if sufficiently large, will affect prices upstream and downstream in the supply chain relative to where the intervention occurred."The CPI (Consumer Price Index) for all food increased 0.8% from July 2022 to August 2022, and food prices were 11.4% higher than in August 2021."
Food productionis a very energy-intensive process. Energy is used in the raw materials for fertilizers to powering the facilities needed to process the food. Increases in the price of energy leads to an increase in the price of food.Oil pricesalso affect the price of food.Food distributionis also affected by increases in oil prices,leading to increases in the price of food.
Adverse weather events such as droughts or heavy rain can causeharvest failure. There is evidence thatextreme weatherevents andnatural disasterscause increased food prices.Climate changewill increaseextreme weatherevents, including droughts, storms and heavy rain, and overall increases in temperature will affect food production.
Wateris a necessary natural resource for organic life making it an essential component in producing goods that sustains human life.For example, a continuing drought in South Africamay - amongst other factors - havefood inflationsoar 11% until end of 2016 according to theSouth African Reserve Bank.Adroughtturns fresh water into a rare commodity making it hard to come by infood production, thus inflating food prices.
The price of food has risen quite drastically during the2007–08and the2010–2012 world food price crises. It has been most noticeable in developing countries while less so in theOECDcountries andNorth America.
Consumer pricesin therich countriesare massively influenced by the power ofdiscount storesand constitute only a small part of the entirecost of living. In particular,Western pattern dietconstituents like those that are processed byfast food chainsare comparatively cheap in the Western hemisphere.Profitsrely primarily on quantity (seemass production), less than high-price quality. For some product classes likedairyormeat,overproductionhas twisted the price relations in a way utterly unknown in underdeveloped countries ("butter mountain"). The situation for poor societies is worsened by certainfree trade agreementsthat allow easier export of food in the "southern" direction than vice versa.A striking example can be found in tomato exports from Italy toGhanaby virtue of theEconomic Partnership Agreementswhere the artificially cheap vegetables play a significant role in the destruction of indigenous agriculture and a corresponding further decline in the already ailingeconomic power.
TheFood and Agriculture Organization(FAO) of theUnited Nationshas developed an "early warning tool" called the Food Price and Monitoring Analysis (FPMA).After the food crisis of 2008 and 2011, FAO developed an "early warning indicator to detect abnormal growth in prices in consumer markets in the developing world".The FPMA uses a variety of data sources to feed their database.
Fluctuating food prices have led to some initiative in the industrialized world as well. InCanada,Dalhousie Universityand theUniversity of GuelphpublishCanada's Food Price Reportevery year, since 2010. Read by millions of people every year, the report monitors and forecasts food prices for the coming year.The report was created by Canadian researchersSylvain CharleboisandFrancis Tapon.
TheNumbeodatabase "allows you to see, share and compare information about food prices worldwide and gives estimation of minimum money needed for food per person per day".
The FAO food price index is a measure of the monthly change in international prices of amarket basketoffoodcommodities. It consists of the average of five commodity group price indices,weighted with the averageexportshares of each of the groups.
TheWorld Bankreleases the quarterlyFood Price Watch reportwhich highlights trends in domestic food prices inlow- and middle-income countries, and outlines the (food) policy implications of food price fluctuations.
There are also some ways of measuring food prices that are more humorous.  These include:
It is rare for price spikes to hit all major foods in most countries at once, but food prices suffered all-time peaks in 2008 and 2011, posting a 15% and 12% deflated increase year-over-year, representing prices higher than any data collected.One reason for the increase in food prices may be theincrease in oil pricesat the same time.
In June 2011, food price inflation in the United Kingdom reached its highest rate in nearly two years, driven primarily by rising energy costs. According to the British Retail Consortium, food prices increased by 4.9% compared to the previous year. The inflationary pressures affected businesses across the food supply chain, including Gail's Bakery, where Managing Director Tom Molnar reported significant impacts on their operations. Economist Brian Hilliard from Societe Generale highlighted that the surge in oil prices was a key factor driving the overall increase in food costs.
It is rare for the spikes to hit all major foods in most countries at once. Food prices rose 4% in the United States in 2007, the highest increase since 1990, and are expected to climb as much again in 2008. As of December 2007, 37 countries faced food crises, and 20 had imposed some sort of food-price controls. In China, the price ofporkjumped 58% in 2007. In the 1980s and 1990s, farm subsidies and support programs allowed major grain exporting countries to hold large surpluses which could be tapped during food shortages to keep prices down. However, new trade policies have made agricultural production much more responsive to market demands, putting global food reserves at their lowest since 1983.
Food prices are rising, wealthier Asian consumers are westernizing their diets, and farmers and nations of the third world are struggling to keep up the pace. Asian nations have contributed at a more rapid growth rate in the past five years to the global fluid and powdered milk manufacturing industry. In 2008, this accounted for more than 30% of production with China accounting for more than 10% of both production and consumption in the global fruit and vegetable processing and preserving industry. The trend is similarly evident in industries such as soft drink and bottled water manufacturing, as well as global cocoa, chocolate, and sugar confectionery manufacturing, forecast to grow by 5.7% and 10.0% respectively during 2008 in response to soaring demand in Chinese and Southeast Asian markets.
Rising food prices over recent years have been linked with social unrest around the world, including rioting inBangladeshandMexico,and theArab Spring.
In 2013,Overseas Development Instituteresearchers showed thatricehas more than doubled in price since 2000, rising by 120% in real terms. This was as a result of shifts in trade policy and restocking by major producers. More fundamental drivers of increased prices are the higher costs of fertilizer, diesel and labor. Parts of Asia see rural wages rise with potentially large benefits for the 1.3 billion (2008 estimate) of Asia's poor in reducing the poverty they face. However, this harms more vulnerable groups who don't share in the economic boom, especially in Asian and African coastal cities. The researchers said the threat means social-protection policies are needed to guard against price shocks. The research proposed that in the longer run, the rises present opportunities to export for Western African farmers with a high potential for rice production to replace imports with domestic production.
In 2015–2020, global food prices have been more stable and relatively low, after a sizable increase in late 2017, they are back under 75% of the nominal value seen during the all-time high in the2011 food crisis. In the long term, prices are expected to stabilize.Farmers will grow more grain for bothfueland food and eventually bring prices down.This has already occurred withwheat,with morecropsplanted in theUnited States,Canada, andEuropein 2009. However, theFood and Agriculture Organizationprojects that consumers still have to deal with more expensive food until at least 2018.
In 2021, global food prices rose significantly in larger part due tosupply chain disruptions during the COVID pandemic,and in 2022, theFAOreported that the world Food Price Index reached an all-time high in February, posting a 24% year-over-year increase. Most of the data for the February report was compiled before the2022 Russian invasion of Ukraine, but analysts said a prolonged conflict could have a major effect on grain exports catalyzing a furtherfood crises.
In March 2024, Nigeria'sfood inflationrate reached 40.01% year-on-year, driven by currency depreciation, supply chain disruptions, and rising agricultural input costs. Essential food items likegarri,millet, andyam tuberssaw significant price hikes. This inflation exacerbates food insecurity and reduces household purchasing power.
This article incorporates text from afree contentwork. Licensed under CC BY-SA 3.0 (license statement/permission). Text taken fromThe State of Food and Agriculture 2019. Moving forward on food loss and waste reduction, In brief​, 24, FAO, FAO.