Category: Micro

From Patrick Westhoff’s The Economics of Food:

“Because there are so many steps between the farm and the consumer, prices usually change proportionately less at the consumer level than they do at the farm level. Even though prices for some food products doubled at the farm level between 2005 and 2008, the increase in US consumer food prices was only 4.0 percent in 2007 and 5.5 percent in 2008. In fact, some of that increase in consumer food prices cannot be attributed to changes in farm-level prices, but rather to high energy prices that increased the cost of transporting and processing food. (…)

In lower income countries, consumers tend to eat more staple foods, and less value is added to food after it leaves the farm. As a result, the sharp increase in world cereal prices from 2005 to 2008 translated into larger increases in consumer food prices in low-income countries than in the United States. For example, FAO reported that consumer food prices in developing countries rose by an average of 13.5 percent in the year ending in February 2008.”

I had my doubts about this book when I clicked “Add to Cart,” but so far I have learned a number of new things from reading it.