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December 17, 2007

The price of what we eat

Food prices are rising in the United States, but they're also increasing across the world. In fact, an index of world food prices is up 20 percent in the past year. In contrast, food prices trended downward in the world during the 1980s and 1990s. What's happened here? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Economists who have looked at this say that the biggest change is in the composition of food that is eaten, especially around the world. The rest of the world is really catching up with the U.S., primarily in meat consumption. Used to be that the U.S. was the big meat-eating country, and the rest of the world, which was a lot poorer, ate grains. Now, as the rest of the world is seeing it's standard of living going up, we're seeing meat consumption go up. And meat is more expensive per calorie, and so that's causing their food prices to go up. For example, meat consumption in China is up in the last decade 50 percent. In South Korea, it's up 25 percent. Saudi Arabia, it's up 18 percent. In contrast, in the U.S., meat consumption in the last decade is up only 10 percent. Now, recently of course, we've had some issues with meat cost because you need grains, primarily corn, to feed to livestock. Corn prices have been going up because of the move toward ethanol. And so we have seen a big jump in meat prices. And again, if you are a country where meat consumption is going up, if meat prices are going up, you are going to see your overall food price jump."

Posted by Dave at December 17, 2007 08:00 AM