Following the roller coaster ride of 2008, farmers and economist alike are apprehensive about the upcoming farming season. Will 2009 be an encore?
Pat Westhoff, research associate professor and co-director at the Food and Agricultural Policy Research Institute - University of Missouri, says it is beneficial to look at drivers behind last year’s roller coaster.
“Almost every single factor that made prices go up in 2007 and the first part of 2008 has reversed itself, almost without exception,” Westhoff says.
He cites the following reasons for why prices rose:
Pat Westhoff, research associate professor and co-director at the Food and Agricultural Policy Research Institute - University of Missouri, says it is beneficial to look at drivers behind last year’s roller coaster.
“Almost every single factor that made prices go up in 2007 and the first part of 2008 has reversed itself, almost without exception,” Westhoff says.
He cites the following reasons for why prices rose:
- <LI style="MARGIN: 0in 0in 0pt">Reduced production in Europe and Australia <LI style="MARGIN: 0in 0in 0pt">Economic growth in Asia and elsewhere <LI style="MARGIN: 0in 0in 0pt">Weaker dollar <LI style="MARGIN: 0in 0in 0pt">Higher petroleum prices <LI style="MARGIN: 0in 0in 0pt">Rapid biofuel expansion <LI style="MARGIN: 0in 0in 0pt">Policy response
- Speculation
- <LI style="MARGIN: 0in 0in 0pt">Sharp increase in global grain production in 2008 <LI style="MARGIN: 0in 0in 0pt">Financial crisis and world economic slowdown <LI style="MARGIN: 0in 0in 0pt">Stronger dollar <LI style="MARGIN: 0in 0in 0pt">Lower petroleum prices <LI style="MARGIN: 0in 0in 0pt">Slower biofuel growth <LI style="MARGIN: 0in 0in 0pt">Policy response
- Speculation
