WEST LAFAYETTE, INDIANA – Food prices have in many cases surpassed the peak levels reached in July 2008. At that time, food-price increases were attributed to growing global demand for food commodities, a major decline in the value of the US dollar, crop failures in some parts of the world, and biofuels. But what is driving the surge in prices today?
I believe that the key factors now are somewhat different from those that drove up food prices in 2008. Growth in global demand for food and feed commodities is still a major part of the story, as are biofuels. But the short- and long-term implications are quite different.