Key Stretch For Harvests - Assignment Example

The article U.S. Head into Key Stretch for Harvests discusses some of the reasons global food prices are on the rise. The United s is the world’s biggest exporter of agricultural products. The U.S. generates 55% of corn, 44% of soybean, 41% of cotton, and 28% of wheat production worldwide. The prices of food items behave according to the law of supply and demand. The rising energy prices are contributing to the rise in food prices as it is becoming more expensive for farmers to produce food.

“Commodity prices are climbing partly because food-importing nations have few other places to shop” (Kilman). Another reason food prices are on the rise is because the demand for food in emerging economies is rising. Also the world population is growing faster than the overall global production of food. The food inflation in the U.S. for 2011 has been 4%, but it has not been higher because the restaurant and supermarket industries have absorbed the added costs instead of passing it to the customer as the industry usually does.

The quality of U.S crops have done down as farmers have responded to high prices by planting more land and then producing price-depressing gluts (Kilman). The overall shortage of food is the primary reason the price of food items is on the rise. The supply is not sufficient to meet the demand. Another factor that is affecting adversely food shortages is bad weather and natural disasters which have destroyed entire crops of food. Work Cited Page Kilman, S. 7 March 2011. “U.S. Farmers Head into Key Stretch for Harvest.

Wall Street Journal. 4 October 2011.