FarmPolicy

September 24, 2018

Commodity Prices, Food Prices and Biofuels

Categories: Audio /Ethanol /EU /Food Prices

Background

The Congressional Research Service issued a report on May 6 (“High Agricultural Commodity Prices: What Are the Issues?”) by Randy Schnepf, which provided this summary of commodity price developments: “Prices for nearly all major U.S. agricultural program crops — corn, barley, sorghum, oats, wheat, rice, and soybeans — have exhibited extreme price volatility since mid-2007, while rising to record or near-record levels in early 2008. Several international organizations have announced that the sharply rising commodity prices are likely to have dire consequences for the world’s vulnerable populations, particularly in import-dependent, less developed nations. In the United States, high commodity prices have pushed farm income to successive annual records and have sharply lowered government farm program costs, but they have also stoked the flames of food price inflation and have raised costs for livestock producers and food processors. In addition, high, unexpectedly volatile prices have increased the risk and costs associated with grain merchandising.”

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