Sunday, April 3, 2011

Food Demand Jumps Due To Population Increase

In the last year, corn and wheat prices have doubled, sugar has gone up 65%, and soybean prices have raised 40%.  While some of these cost increases have been caused by poor weather, a major influence is the rising demand for food due to the increasing population. So long as economies develop at increasing rates Joe Milano, portfolio manager of the T. Rowe Price New America Growth Fund, says people will tend to “[eat] more meat, which puts upward pressure on demand for feed grains.” With rising grain prices, the law of supply and Food and Agriculture Organization tells us that food production will have to increase by 70% by 2050 just to meet demands. Since fertile land is becoming scarcer with the development of cities, the only productive way for farmers to increase their revenue and supply is by investing in irrigation systems that conserve water and improve food production, such as Valmont Industries and Lindsay Corporation. Another idea would be to include genetically modified seeds that withstand droughts and insects better and that have nutrients that will benefit the soil and irrigate better. With a couple options available to farmers it’s easy to see how this rise in demand will affect the quantity supplied of such goods along with their price. The growing demand due to the increasing population is definitely an appeal to farmers and anyone looking to enter the industry, knowing their services will be long needed.


Written by: Holly Williams

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