Increasing food prices?

Question

. What are the major reasons food prices have gone up so fast this past year, quarter; and what is the impact of such increases on the consumer; and on the revenue and profits of farmers. Include a discussion about the costs, variable and fixed, of farmers and the extent to which they have been increasing and the impact on farmer profits.

Answer 1

The reason food prices are rising so quickly is twofold.

1 - supplies are somewhat diminished, while demand continues to rise as the population increases

2 - and the larger reason, is that the US supply of dollars is rapidly being increased (by the Fed) without regard for corresponding growth.

Of course, all consumers eat, so all are impacted, which hurts most the poorest of the populace.  The farmer may profit more during this scenario, which will motivate him to produce more, which will increase supply and tend to bring prices downward.

However, as the dollars become less valuable, the farmer is also hurt.

The battle against inflation therefore has few, if any, winners.  The politicians should have long ago modify the laws as to the Fed to prevent it from manipulating our economy.  The free market has always done that best.

Answer 2

Farmers now can get more money by growing corn for oil instead of food. Since less farmers are growing food the prices have gone up.

Answer 3

Increased demand in china  and other poor countries because more people can afford meat.

Crop failures in some regions in the would.

Diverting  part of US crop to make ethanol.