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Global Agriculture and the Rising Cost of Food

Artificial shortages, increased consumption, weather-based crop destruction, and rising prices of raw materials can be seen throughout the US and the global economy, especially with civil and political unrest on the rise in the news. NPR recently published an article about rising food prices, but what it doesn't tell you is that there has also been a global decrease in food production.

Let's look at wheat production.

Abdolreza Abbassian, senior economist at the FAO, predicts that wheat prices may keep rising until the summer because importers are speeding up purchases to outrun inflation. Prices are more likely to stay high or go higher in the next six months than decline. (Source: Businessweek) That's right, countries are hoarding wheat and a few have already banned exports of their domestic wheat.

Market Factors:

As for US consumers of wheat products, since we're able to procure wheat from a multitude of domestic and foreign sources, we'll probably not notice the price shift, nor the inflation that it is bound to come with it.

See also:
Pooley, E. and Revzin, P. "Hungry for a Solution", Businessweek, 2/21-2/27/2011, p. 7-9
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