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Monday, February 6, 2012

Cargill: More people = higher food prices

Observation:  An article from this morning’s Bloomberg Businessweek explains that higher food prices will be a natural consequence of the growth in global population.  Click here to see the story. 

Implications:   Yes, this story looks out a few years… but it’s important, because we’re seeing a dress rehearsal right now in the energy markets.  Higher demand from developing economies like China and India are, in part, a reason that oil prices are climbing across the globe.  The Bloomberg story simply suggests that the same thing will happen to the world’s food supply; as populations grow, countries will increasingly find themselves in a supply-and-demand competition for groceries.

After seeing real prices fall, in effect, for the past fifty years… how will consumers in developed nations react to food prices that very definitely rise?  Can we expect particularly strong pressure on meat and seafood prices?  Might that stimulate a change in the kinds of foods people consume?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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