Food & Commodity Prices Are a Major Global Problem for Consumers & the Food Industry Overall

Since the mid-2000s, the upward march of prices for food commodities has been so dramatic that the cost of food has become a major concern on a global basis. This trend affects consumers, industry and government with a broad brush. Those feeling the most pain from rising food prices are consumers in low-income nations where food purchases account for a very large portion of monthly household budgets. Americans spend only about 10% of household income on food; the ratio can be 50% or more in nations with modest household incomes.

In 2013 and early in2014, high food prices were a stark contrast to the cheap food years of the 1970s and 1980s. For decades, improving farm technologies and high-output genetically modified seeds had consistently dampened food costs. The International Monetary Fund (IMF) calculates a food prices index that shows real food prices, adjusted for inflation, fell by nearly 75% over a 31 year period ending in 2005. Today, however, low-cost food is a thing of the past. The first three months of 2014 saw commodity futures prices for Arabica coffee rise by 71%, lean hogs by 42%, oats by 29%, wheat by 11% and live cattle by 8%. These price spikes were due to varying circumstances, such as regional droughts and a disease that is plaguing hogs in some regions.

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Food & Commodity Prices Are a Major Global Problem for Consumers & the Food Industry Overall, Business and Industry Trends Analysis

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