What causes the increase in food prices?



  1. 0 Votes

    There are many different factors that cause the rise and fall of food prices. First we must consider the production of food. When storms or winter storms destroy crops food shortages will cause a rise in price as the supply will be short and the demand for that crop will rise. In a season where there is a great production year a surplus of crops can occur and prices will drop as the supply exceeds the marker demand.

    Inflation will be another big factor. As inflation rises the value of the dollar goes down and this will cause food prices and the prices of everything else to go up. If inflation goes down prices will also come down.

    Oil is the lifeblood of America and it is also involved in the production of food and other goods. As the price of oil rises the cost of farming and working the land will rise. This rise in cost gets passed onto consumers in the form of higher prices in products.

    Government policy is another factor in food prices. If a tariff is put in place for a certain food product it will cost more for people to buy it. Also the government can subsidize farmers and this can cause a drop in the price of their food products.

Please signup or login to answer this question.

Sorry,At this time user registration is disabled. We will open registration soon!