The Economics of Food Price Volatility

The Economics of Food Price Volatility

Jean-Paul Chavas, David Hummels, and Brian D. Wright

Print publication date: 2015

ISBN: 9780226128924

Publisher: University of Chicago Press

Abstract

There is still no consensus on the underlying reasons for recent drastic changes in food prices and continuing agricultural market volatility merits a thorough investigation. This book is a collection of research and discussion by various experts on food price volatility, its effect on the farmer and consumer alike, and an evaluation of current knowledge on the subject. They also identify topics that merit further analysis. With great advances in agricultural technology, the fluctuations can largely be attributed to changes in economic policies. Corn has a high degree of importance in the US, which holds about 40% of the crop’s world production. Government subsidies for corn to be used as ethanol have had major impacts on food prices and made them unusually sensitive to weather shocks. Other price fluctuations in food can be attributed to substitution between calorie sources and policy changes, particularly in impoverished countries seeking to insulate their market from more prosperous nations. In recent years, some observers have claimed that food price bubbles have been generated by financial investments in agricultural commodity markets. This new research on food price volatility may help both private and public decision makers to develop improved management strategies and policies that can address current and future market instability.

Table of Contents

Introduction

Jean-Paul Chavas, David Hummels, and Brian D. Wright

2 Corn Production Shocks in 2012 and Beyond

Steven T. Berry, Michael J. Roberts, and Wolfram Schlenker

5 Bubble Troubles? Rational Storage, Mean Reversion, and Runs in Commodity Prices

Eugenio S. A. Bobenrieth, Juan R. A. Bobenrieth, and Brian D. Wright

6 Bubbles, Food Prices, and Speculation

Nicole M. Aulerich, Scott H. Irwin, and Philip Garcia

8 Food Price Spikes, Price Insulation, and Poverty

Kym Anderson, Maros Ivanic, and William J. Martin Christophe Gouel

9 Trade Insulation as Social Protection

Quy-Toan Do, Andrei A. Levchenko, and Martin Ravallion