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Weather food price are likely to continue rising in future
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Answer:
In 2021, food-at-home prices are expected to increase between 2.5 and 3.5 percent, and food-away-from-home prices are expected to increase between 3.5 and 4.5 percent.
Explanation:
Five Causes of Higher Food Prices
In the short-term, many factors affect food prices, making them volatile. These factors include supply and demand, weather, disease outbreaks, war, and natural disasters.
In the long run, there are five underlying forces that tend to drive up food prices
High oil prices
Food gets transported great distances, and high oil prices raise shipping costs. You can expect high gas prices about six weeks after an increase in oil futures. Oil prices also affect farming. Oil byproducts are a significant component of fertilizer.2
climate changing
Climate change creates more extreme weather. Its cause is greenhouse gas emissions that trap heat, causing air temperatures to increase. Hot air absorbs more moisture. It rains less, water from lakes and rivers evaporate, and the land dries up. When it does rain, the water runs off the land instead of getting absorbed into the water table. That creates floods, which in turn can damage crops.3
Government Subsidies
U.S. government subsidies for corn production for biofuels take corn out of the food supply, raising prices. The U.S. now uses 37% of its corn crop to make ethanol. That's up from 6% in 2000.4
World Trade Organization Limits on Stockpiles
The World Trade Organization (WTO) limits the amount of subsidized corn and wheat that countries can add to global stockpiles. The United States, the European Union, and some developing countries heavily subsidize their agricultural industries. Farmers in those countries receive an unfair trade advantage. The WTO limits stockpiling to lower this edge. But it also reduces the amount of food available in a shortage. That increases food price volatility.5
More Meat Eating
People around the world are eating more meat, especially pork, as they become more affluent. It takes more grain to feed the animals needed for meat-based meals than is necessary for grain-based meals. Higher demand for meat means higher grain prices. Over time, this could offset lower U.S. demand for meat and dairy.67
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