The Relationship Between Food Prices and Economic Stability
When the price of food increases, people’s lives are affected. They have to spend more money on food and less money on other things. This could lead to economic instability, especially if goat meat prices fluctuate. Between 2006 and 2008, there was a dramatic increase in the price of rice, wheat, corn, and soybeans. The world supply of food during this period declined. The wheat stockpile in the U.S. was at a 60-year low.
There was another food crisis between 2010 and 2012. During this period of time, the price of corn and soybean reached record highs. Abnormally dry summers in the U.S. and Europe were blamed for the high food prices. The growth of biofuels may also have contributed to the rising food prices. 40% of corn produced in the U.S. in 2012 was used to make ethanol. This was a dramatic increase in corn-ethanol fuel production. In 2006, only 15% of corn produced in the U.S. was used to make ethanol.
Food Prices Must Match Population Growth
In order to prevent an increase in the price of food, food production needs to increase at a higher rate than population growth. Goat meat prices are important in many countries. It may have affected the growth of many growing economies. The middle class expanded in the most populous countries in the world. In India, the growth rate of the middle class was 9.7 percent in 1990. In 2007, the middle class grew by 30 percent. In China, the middle class grew by 8.6 percent in 1990 and 70 percent in 2007.
Food Prices are Affected by Petroleum Prices and Fertilizer Prices
In 2007, the price of fertilizer increased. The price of ammonia, urea, muriate of potash, sulfuric acid, and diammonium phosphate tripled. The price of oil also increased. Most types of fertilizer require petroleum or natural gas to manufacture. This contributed to the increase in food prices. A similar food crisis occurred from 1972-74. During this period, the price of oil affected the price of food. Oil prices were affected by the oil embargo imposed by OPEC.
FAO Food Price Index and World Bank Monitor the Change in Food Prices
On a monthly basis, the FAO food price index reveals the changes in prices for five staple foods. This includes cereal, vegetable oil, dairy, meat, and sugar. Goat meat prices are interesting. Goat meat has an advantage over other red meats. It is healthier. It has less cholesterol and less fat than other types of red meat. Goat meat prices could reveal the world’s preference for more healthier meat. Goat meat prices could also reveal the demand for goat meat.
The World Bank publishes a quarterly report titled ‘Food Price Watch.’ In the report, trends in food prices are analyzed for low and middle income countries. The report also explains the consequences of food policy on food price variations.