Food commodities are one of those things we don’t often think about when we go to the grocery store. We just notice that bread has gone up a dime. We are shocked when milk costs five dollars a gallon. We’re not sure who to blame, but we assume it’s greed that makes these things happen. Not so. There are many things that affect food commodities, and when those things happen, it can put a real strain on the household budget.
Weather
Weather has a huge impact on food production. Wheat, rice and corn commodities can fluctuate from year to year based on the the weather conditions. Too much rain or a drought can cause shortages in a particular staple crop, and that in turn will drive up market value as demand outreaches supply. When this happens, it’s not unusual for farmers to hold back crop harvests the next year to artificially keep the trading price higher.
Disease
Tainted meat can kill the beef, pork or chicken industry. So can a disease that makes the livestock unusable. Pork belly commodity trades seem sort of old fashioned in this technological time, but they are important when it comes to basic needs; like eating.
Politics
Naturally, many of the price increases in food delivery have to do with politics. Everything from war in the Middle East, that will affect oil commodities, to embargoes can alter the cost of food. If fuel goes up, than transportation costs go up, so the food commodities go up, too. Sugar and cocoa prices can be affected by political unrest in the Central and South Americas. So can oil prices. Finally, a farmer friendly politician who gets elected to office is a food friendly politician. If it’s affordable for the farmers to do their business, then food commodities will reflect this.