In the summer of 2007, prices for grain and milk shot up both on the world market and within the EU's single market. The price hike surpassed those observed in 2001. Consequently, prices for food rose as well; their share in the general price increase was greater than in past years. These effects were triggered by a combination of several factors: strong economic growth and changing consumer habits in densely populated threshold countries as well as the increasing use of plants as energy sources together resulted in intensified demand. Apart from crop failures, the restraint exercised by agricultural politics with regard to direct market intervention and a reduction in government-financed stocks tightened up the supply. Such supply effects were the main cause for the sharp increase in global market prices for grain and milk in 2007. With grain used as feed, meat is expected to experience a price surge as well. Even though politics interferes less directly with the agricultural markets, it still has a range of measures at its disposal to boost supply and thereby curb prices. Such tools, however, are not effective in the short term but can be expected to impact in the second half of 2008 at the earliest.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 80 (2007) Issue (Month): 12 (December) Pages: 965-977 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF