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Department of Economics
Drivers of Food Prices
Chad [email protected]
515-294-9911
Iowa Hunger SummitDes Moines, IowaOctober 14, 2008
Department of Economics
The Food Dollar
Source: USDA-ERS
Department of Economics
Farm Value in Individual Foods
Source: USDA-ERS
Farm share of retail price1 Food 1998 1999 2000
(Percent) Milk, ½ gal. 41 39 34 Orange juice conc., 12 fl. oz. 38 37 33 Corn, 303 can (17 oz.) 23 22 22 Applesauce, 25-oz. jar 14 14 16 Tomatoes, whole, 303 can 7 7 7 Sugar, 1 lb. 32 31 27 Flour, wheat, 5 lbs. 20 18 19 Margarine, 1 lb. 26 17 15 Rice, long grain, 1 lb. 22 19 14 Peanut butter, 1 lb. 26 23 22 Potato chips, regular, 1-lb. bag 8 9 8 Chicken dinner, fried, frozen, 11 oz. 13 13 14 Potatoes, french fried, frozen, 1 lb. 11 11 10 Bread, 1 lb. 5 5 5 Corn flakes, 18-oz. box 4 4 41Computed from unrounded farm values.
Department of Economics
Factors Leading to Higher Commodity Prices
Source: USDA-ERS, Trostle, July 2008
Department of Economics
Events in 2007Droughts:
Northern Europe, Ukraine, Russia, Northwest Africa, Turkey, Australia, and Argentina
Increased export taxes:China, Argentina, Russia, Kazakhstan,
Malaysia, and Indonesia
Export restrictions:Argentina, Ukraine, India, Vietnam, Serbia,
Egypt, Cambodia, Indonesia, and Kazakhstan
Department of Economics
Commodity Price Ratios (Sept. 2006 =1)
0.5
1.0
1.5
2.0
2.5
3.0
3.59/1
/2006
11/1
/2006
1/1
/2007
3/1
/2007
5/1
/2007
7/1
/2007
9/1
/2007
11/1
/2007
1/1
/2008
3/1
/2008
5/1
/2008
7/1
/2008
9/1
/2008
Corn Soybeans Wheat Rice
Department of Economics
Crude Oil Prices
0
20
40
60
80
100
120
140
160
$ p
er
barr
el
Department of Economics
Commodity Price Indexes
Source: Internation Financial Statistics
Department of Economics
Thanks for your time!