The Facts Behind Food Prices

THE FACTS BEHIND FOOD PRICES DISEASE WEATHER Drought, flooding and Diseases and infestations ETHANOL POLICY cause shortages in grains LIMITED FARMLAND freezing reduce supply, GLOBAL DEMAND which can cause and livestock, which reduce Due to U.S. mandates, Farmland is being lost A growing middle-class in dramatic price increases in essentialcrops, as food supply; on average, 35 percent of the corn crop at an alarming rate due China and India means in- roughly 35 percent of global - or 5 billion bushels - to development and other when the Feb. 2011 creased demand for beef and crop production falls prey are used for ethanol, factors; at the same time, freeze destroyed grains; it takes over 10.2 million to diseases and pests. diminishing supply for food prices increase as 1.5 million acres, or bushels of corn to feed every- more farmland is devoted one in China just one additional other uses to its lowest 15 percent of Mexico's level in 15 years. to non-food items. egg per year. corn crop. T000 00 0000 ODDOD 0OODO ODDO NOODD 00 00 no00000000 00000 00 1000 GOOD TRANSPORTATION FLUCTUATING CURRENCIES %24 Rising oil prices drive up the costs of bringing A weak U.S. dollar drives com- food to market; these costs are passed along modity prices higher; corn, GOVERNMENT TARIFFS to consumers. wheat and soybean prices Tariffs that countries use to support would be at least 17 percent GEOPOLITICAL CONFLICTS ! their domestic production reduce lower if the dollar had main- tained its value from 2006. competition, Ilimit world supply and Political unrest can disrupt productivity, impact increase prices; Russia's ban on supply and commodity pricing; wheat prices wheat exports reduced global supply spiked as a direct result of protests in Egypt, by 15 million metric tons in 2010/11. one of the world's biggest wheat importers.