The daily global news continues to be inundated with stories of rising food prices, and accompanying rises in poverty and hunger. Recent droughts in China have been added to the list of factors driving food prices, specifically commodity prices, up around the world. Policymakers are now faced with decisions regarding the appropriate response to these increases.

Global food prices increased for the eighth consecutive month in February, according to the FAO Food Price Index. With the exception of sugar, prices of all agricultural commodities continue to rise, bringing the Price Index to its highest level on record. In particular, the FAO expects a sharp decline in cereal stocks in 2011 due to increased global demand and decreased production. Export prices of major grains have risen 70 percent since February 2010.

To view the full report, visit http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/

The World Bank this week issued a statement saying that increasing food prices have driven an estimated 44 million people into poverty in low- and middle-income countries since June 2010. This staggering increase in global poverty levels has serious economic, social, and political implications. Many experts and media outlets worldwide have linked rising food prices to riots in Algeria, the ousting of President Zine El Abidine Ben Ali in Tunisia, and the recent riots in Egypt which led to the historic resignation of President Hosni Mubarak.

The USDA Economic Research Service has released its February 2011 reports for wheat, rice, and soybean outlooks. These reports can help inform policy makers of important current issues involving food security, farming, natural resources, and global markets.

Download the February reports below. For more information regarding the USDA ERS reports, visit http://www.ers.usda.gov/

The World Agricultural Supply and Demand Estimates (WASDE) report provides monthly comprehensive forecasts of supply and demand for major U.S. and global crops, supplied by the USDA. Crops covered include wheat, coarse grains, rice, and oilseeds. This report can explain past and current global commodities trends, as well as predict trends for the coming year.

Download the February report below. For more information regarding the WASDE reports, visit http://www.usda.gov/oce/commodity/wasde/

With all the news of floods in Australia decimating the country’s wheat crop and adverse weather in the US cutting corn and soybean harvests, commodities prices across the globe are again seeing drastic increases, raising fears that we may be witnessing a return of widespread food insecurity and subsequent political and economic turmoil. Moreover, the FAO’s recent statement that global food prices reached a record high in December 2010 has sparked the memory of the crisis in 2007–08 and turned global attention back to the issue of food security.

As global food prices continue to surge, individuals and families in the developing world may be facing a new food reality. Fluctuations in the price of staple commodities may benefit some households’ welfare (producers) while hurting others (consumers). Understanding how price increases affect the developing world on a household level can pose a major challenge to global policymakers as they strive to respond to global and national food crises.

Commodity production and trade provide the primary livelihoods for millions of households throughout the developing world. The development of this sector is essential to poverty alleviation efforts and overall economic development. However, as witnessed in recent spikes in the price of wheat and soybeans, the commodity sector is challenged by severe price volatility and high marketing costs. Many believe that commodity exchanges provide a way to mitigate these risks and increase economic efficiency in a liberalized market environment.

Apparent similarities between today’s rising wheat prices and the food-price crisis of 2007-2008 are just that: apparent, not real. Suggestions to the contrary serve to drive up prices and hurt poor people, who spend much or most of their incomes on food. They need neither jittery markets nor ad hoc protectionism, which has exacerbated past food crises.

Recent events in Russia, one of the largest suppliers of wheat in the world, have raised concern about the current and future price of wheat and wheat-based products. This article briefly examines the issue and determines if there is in fact cause for serious alarm.

Summary of Facts

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