Verified Document

Supply And Demand Of Grain In The United States Essay

Related Topics:

Market of Grain in the United StatesIn the United States, millions of Americans are confronting the latest trends in the commodities markets where the costs of agricultural products have driven up costs of breakfasts of average Americans. Over the past year, the price of orange juice has increased a quarter, and the price of milk has also risen by 5%, and egg by a fifth. The issues have made General Mills and Kellogg's to increase the prices of their breakfast cereal products. The cause of an increase is due to a recent rise in the price of grains such as wheat and corn. Underpinning the rise in the price of grains is that the demand has outpaced the supply because of the growing demand for cereals for the production of biofuels such as ethanol. Thus, the author is trying to reveal the factors that lead to an increase in the price of grain, which include the rise in the use of grains for the production of biofuels.

Moreover, the use of cereal in making biofuel has tripled since 2000 where ethanol distilleries consume a fifth of the U.S. corn making the demand of grain accelerating. In the 1990s, the demand for biofuel increased by 1.2% yearly. Ten years after, the demand for grain has increased by 1.4%, and will increase by 1.9% annually according to Goldman projects. In 2009, the demand for corn has exceeded the supply, moreover, farmers...

An increase in the price of grain has also led to increasing in the prices of eggs because the grain used to feed poultry has become more expensive.
1.Agflation

Agflation is defined as an increase in the food prices because of the rise in demand for agricultural products that drives up the inflation. Thus, agflation is a combined word of agricultural products and inflation. The term inflation is the rise in the price of goods and services, thus, agflation is an increase in the prices of the agricultural products. The agflation is not due to an increase in money supply but an interaction in demand and supply. For example, when a demand of cereal is more than the supply, there will be an increase in the price of corn.

2. Major problem facing the market for crops

The major problem facing the market of crops is that the world is running short of certain categories of crops because of underproduction. Moreover, there has been a decline in the human consumption because of moderate growth of population. An increase in the production of biofuels has also increased the demand for cereals. These factors have made the demand for agricultural products to be greater than supply leading to increasing the prices of crops.

3. Cause of this problem

Cite this Document:
Copy Bibliography Citation

Related Documents

United States Engaged in a
Words: 3295 Length: 10 Document Type: Term Paper

Currently the United States consumes more than 19.6 million barrels of oil per day, which is more than 25% of the world's total oil consumption. Through its isolationist policy agenda, the U.S. government has been able to leverage its military and economic might to control most of oil production in South America. Instead of attempting to restructure the financial infrastructure of South American oil producers such as Panama, Ecuador

Marketing of Atkins Diet Products in Europe Vs. The US
Words: 7184 Length: 18 Document Type: Term Paper

Marketing of Atkins Diet Products in Europe vs. The U.S. Background on Atkins Diet (A) Who was Robert Atkins? Atkins was born in Columbus, in the state of Ohio in the year 1930. After having joined the University of Michigan, he graduated with a Major in Pre-meds, after which Atkins received his Medical Degree in the year 1955 from the Cornell University Medical School. By the year 1959, he had finished his residencies

Criminology Counterrorism the USA Patriot
Words: 1649 Length: 5 Document Type: Thesis

These liberties are those on which this country was formed and have been upheld for many years as absolute certainties. The Patriot Act has put a lot of doubt on whether these liberties are still protected guarantees. With this act giving the Government the power to use wiretaps to spy on people, search warrants to look for things that they don't even have to tell you about and the ability

Case Study Supply Chain Whirl
Words: 5412 Length: 14 Document Type: Case Study

Whirlpool Whirl Pool Supply Chain Management Supply Chain Management Critical appraisal of Whirlpool's Supply Chain Management Company Overview Products and Services Critical review of Operations Contribution to business performance System Changes Changes in Internal Forecasting Process Business Performance Results Criteria for trade Partner Fit Competitive advantage Critical Evaluation of System Customer Centric-Supply Chain Management System Collaborative Supply Chain Whirlpool's production Current System Changes Planning and sourcing decisions Planning Sourcing Drawbacks of Whirlpool delivery system Inventory Delivery Factors for taking supply chain management decision Figure: Supply Chain Performance factors Gap Analysis Strategic partnership Integration Reduced Cost and Inventory Future trends

Agriculture American Grain and Food
Words: 1789 Length: 5 Document Type: Research Paper

Conclusion As all these studies show, ethanol is not exactly the environmental darling that many seem to think it is. It is actually helping to raise food prices, it is adding to world hunger, and producing it may be actually adding to global pollution rather than easing it. Much more study needs to be done on all the aspects of biofuels, including ethanol, and Congress needs to take action and stop

Subway Supply and Demand Subway Corporation: Supply
Words: 1086 Length: 3 Document Type: Essay

Subway Supply and Demand Subway Corporation: Supply and Demand Subway Corporation: Supply and Demand Supply and demand of a good or service in economics is the basis for economic analysis in its entirety. Supply and demand centers on the different quantities that a producer or producers will make available to the market at different prices over a given period of time. The law of supply and demand is twofold. The law of supply functions

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now