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On the upsurge of U.S. food prices revisited

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  • Baek, Jungho
  • Koo, Won W.

Abstract

The objective of this study is to empirically examine the effects of changes in exchange rate, commodity price and energy price on five U.S. food prices — cereal/bakery, meats, dairy, fruits/vegetables and beverages. The Johansen cointegration analysis and a vector error-correction (VEC) model are applied to monthly data for the 2001–2010 period. Results show the existence of stable long-run relationships among the selected variables. We also find that energy and commodity prices have influenced U.S. food prices mainly through changes in prices of cereal/bakery, meats and dairy. Finally, exchange rate is found to have been a significant factor influencing U.S. food prices. The Energy Independence and Security Act of 2007 is one of main driving forces for the recent food price inflation, which has affected negatively consumers, especially low income households, in the United States.

Suggested Citation

  • Baek, Jungho & Koo, Won W., 2014. "On the upsurge of U.S. food prices revisited," Economic Modelling, Elsevier, vol. 42(C), pages 272-276.
    • Handle: RePEc:eee:ecmode:v:42:y:2014:i:c:p:272-276
    DOI: 10.1016/j.econmod.2014.06.018
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    4. Xiangjun Wu & Juan Xu, 2021. "Drivers of food price in China: A heterogeneous panel SVAR approach," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 67-79, January.
    5. Emanuel Kohlscheen, 2022. "Understanding the food component of inflation," Papers 2212.09380, arXiv.org.

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