A study has found that market forces have provided good food price stability over the past half century, despite extreme weather conditions.
The researchers analysed data on American wheat production, inventories, crop area, prices and wider market conditions from 1950 to 2018, together with records of annual fluctuations in the weather for the same period. This showed strong evidence of an increase in weather and harvest variability from 1974 onwards.
The authors found that in the US the market system around wheat has remained competitive, functioning well and adapting to the new uncertain climate conditions. The potential for weather fluctuations to adversely affect wheat prices has increased, but in reality this hasn't been passed on to the market. Wheat prices remain relatively stable, along with the price of associated goods.
Commenting on what policymakers can take from the research, Dr De Lipsis says:"We have shown that market forces provide a powerful stabilising mechanism to counter the increased variability in weather and harvest observed in the last half a century. The authors acknowledge that stability is easier to achieve in developed and more affluent countries, but say that their results underscore the need to prioritise investment in these key areas in developing regions to ensure a reliable and secure food supply in the future.Most Americans report having personally experienced the effects of extreme weather, according to new survey data. An analysis finds that a reported exposure to extreme weather is associated with ...
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