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Analyzing Factors Affecting U.S. Food Price Inflation

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  • Baek, Jungho
  • Koo, Won W.

Abstract

Since the summer of 2007, U.S. food price has increased dramatically. Given public anxiety over fast-rising food prices in recent years, this paper attempts to analyze the effects of market factors ─ prices of energy and agricultural commodities and exchange rate ─ on U.S. food prices using a co-integration analysis. Results show that the agricultural commodity price and exchange rate play key roles in determining the short- and long-run movement of U.S. food prices. It is also found that in recent years, the energy price has been a significant factor affecting U.S. food prices in the long-run, but has little effect in the short-run. This implies the strong long-run linkage between energy and agricultural markets has emerged through production of commodity-based ethanol in the recent years.

Suggested Citation

  • Baek, Jungho & Koo, Won W., 2009. "Analyzing Factors Affecting U.S. Food Price Inflation," Agribusiness & Applied Economics Report 54248, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaae:54248
    DOI: 10.22004/ag.econ.54248
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