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    Increasing Food Prices Increasing Food Prices Presentation Transcript

    • Increasing Food Prices By Aric, Shaana, Kukesan, Noah and Ezra
    • Table of Contents
      • Movie
      • Statistics and Background
      • Causes of Rising Food Prices
        • Economics of Food Prices
        • Natural Disasters and Disease
        • Ethanol Fuel: The Opportunity Cost
      • Effects on Food Prices
      • Solutions
    • Statistics and Background (History)
      • Thomas Malthus (1766-1834)
        • British Economist & Demographer
        • Wrote An Essay on the Principle of Population (1798)
        • Predicted food shortages
          • Human population increases exponentially
          • Food production increase linearly
    • Statistics and Background (Population Growth)
    • Statistics and Background (Population Growth)
    • Statistics and Background (Population Growth)
    • Statistics and Background (Current Statistics)
      • http://www.worldometers.info/
    • Statistics and Background (Food Production Growth)
    • Statistics and Background (Food Production Growth)
    • Causes of Rising Food Prices (Economics of Food Prices: Demand)
      • Food is always in demand all around the world, because it is a need and has no substitutes.
      • If the food market increased all of its prices, then its demand would remain the same, because food is inelastic.
      • If the price of a certain food product increases, people tend to look for a substitute product, but that is more affordable and/or convenient.
    • Causes of Rising Food Prices (Economics of Food Prices: Demand)
      • As the price of a certain food product increases, demand gradually decreases.
      • The demand of food varies in different areas of the world.
      • As demand for an item increases, prices rise.
      • Demand determinants of a certain food product include:
        • Buyers’ Incomes*
        • Number of Buyers*
        • Buyers’ tastes/preferences
        • Prices of substitutes
        • *Also applicable for food in general
    • Causes of Rising Food Prices (Economics of Food Prices: Supply)
      • When the price of food increases, the supply tends to increase
      • When price and supply increase, profits increase
      • If prices of a certain food product slip, then sellers supply less of the food product.
    • Causes of Rising Food Prices (Economics of Food Prices: Supply)
      • Amount of supply varies in different areas of the world
      • When manufacturers respond to the price increase of a food product, they supply more, and thus bring the price of this food product down.
      • Supply Determinants affecting the supply of food include:
        • Cost to Produce
        • Number of Sellers
        • Technology Used
        • Prices of Related Products
        • Nature/Environment.
    • Causes of Rising Food Prices (Economics of Food Prices: Scarcity)
      • Scarcity: the basic economic problem which arises from people having unlimited wants while there are limited resources
      • Because of scarcity, economic decisions must be made to allocate resources efficiently
      • This is not always the case, especially with food.
    • Causes of Rising Food Prices (Economics of Food Prices: Scarcity)
      • Many countries lack the necessary amount of food to feed its population, and therefore food is scarce in those areas.
      • Food is plentiful in some areas, but since it is very expensive, many people can not afford food, and starve.
      • This is an ongoing worldwide issue that has yet to be solved.
    • Causes of Rising Food Prices ( Economics of Food Prices: Elasticity)
      • Food has an inelastic demand because:
        • There is no substitute for food.
        • Food is a necessity .
        • Food tends to be a small fraction of income.
      • Food has an inelastic supply because:
        • Suppliers cannot instantly increase the production of food.
        • Food can not be stored easily.
    • Increasing Natural Disasters (Historic Natural Disasters)
      • Dust Bowl
        • Series of destructive wind and dust storms that hit the United States of America in the 1930’s
        • Lasted about a decade
        • Caused from drought and over ploughing, and no crop rotation
        • Affected 100,000,000 acres or 400,000 km2
        • Food prices increased because of a much lesser supply due to lack of farm land
        • Farmers were without jobs or land and food was scarce
    • Increasing Natural Disasters (Recent Natural Disasters)
      • Mad Cow Disease: Bovine Spongiform Encephalopathy (BSE)
        • Caused by infectious proteins' called prions (dead animal proteins)
        • Infects cows when ingested from food
        • First found in Canada in May 2003
        • The same month many countries closed of importation of Canadian beef or cows
        • Cost of Canadian cattle dropped from $1300 to $15
        • BSE infected cow was found in US but traced from Canada
        • US originated cow found infected with BSE, countries, excluding Canada
        • banned importation from US
        • Price increased due to lack of supply of healthy cows
        • Once BSE was controlled 100’s of cows killed to fix inflation
    • I ncreasing Natural Disasters ( Historic Natural Disasters)
      • E. Coli(Escherichia coli)
        • Found in lower intestines of warm-blooded animals; generally cows
        • General contracted by eating uncooked ground beef
        • Caused people to be afraid to eat ground beef
        • Over supplied once was contained large amount of product was useless or outdated
      • Listeria
        • Caused by eating food contaminated with the bacterium Listeria monocytogenes
        • Found in maple leaf products caused mass recall and raise of price for companies other then them
        • People did not want to eat meat supply exceeded demand and product was destroyed
    • I ncreasing Natural Disasters ( Historic Natural Disasters)
      • Desertification
        • Degradation of land in arid and dry sub-humid areas
        • Caused by overgrazing, over cultivating, increased fire frequency, water impoundment, ect.
        • Desertification is continuously reducing the supply of agriculture a country possesses
        • This increase the need for importing and the cost of the food its self
        • With continuing trends in 2025 Africa will only be able to physically feed 25% of its people leaving more starving
      • Midwest Floods
        • Flash floods in the Midwest in the US are continuously destroying food supplies increasing the cost and scarcity
    • Increasing Natural Disasters (Predictions)
      • With the occurrences of natural disasters and food related disease people are continuously trying to fix these problems
      • Not all people have the kind of protection people in major countries such as Canada have
      • Once we can help control or reduce the effects of natural disasters and food related disease and illnesses we will then be able to fix the ever increasing food prices
      • Also be able to help those who are less fortunate
    • Ethanol Fuel (Background)
      • Ethanol was one of the first chemical processes.
      • Late 1970’s: U.S. fuel industry introduces ethanol to reduce dependence on foreign oil.
      • There are different methods to produce ethanol fuel. These are:
        • Ethanol fermentation
        • The combination of ethylene (gas made from petroleum) with water.
    • Ethanol Fuel (History)
      • The first American ethanol fuel that was 90% gas and 10% ethanol, and was called Gasohol or E10.
      • Simultaneously, Brazil introduced a 100% ethanol replacement for gasoline: E100.
      • E100 required specially designed vehicles and fuel pumps.
      • 1990’s: U.S. automakers create flexible fuel vehicles (FFVs) which use any mixture of ethanol and gasoline, containing up to 85% ethanol.
    • Ethanol Fuel (Current Popularity)
      • Now, people drive millions of FFVs.
      • Most of Brazil’s automobiles are now FFVs
      • Ethanol has shown great economic and environmental potential as a fuel.
      • Ford, Chrysler and General Motors all sell FFVs
    • Ethanol Fuel (Current Popularity)
      • Concerns have been raised regarding:
        • The decline in soil fertility due to the reduction of organic matter.
        • The decrease in water availability and quality.
        • The large increase in the use of pesticides and fertilizers.
      • As demand for ethanol fuel increases, food crops are replaced by fuel crops, resulting in a decrease of food supply, and an increase in the price of food.
      • Ethanol’s growth in demand is a factor for the increase of price of many foods, including: corn, barley, all grain crops, chicken, beef, cheese and animal food.
    • Effects on Rising Food Prices (Extrapolating Data)
    • Effects on Rising Food Prices (Predictions)
    • Effects on Rising Food Prices (Predictions)
    • Solutions
      • Check out the links and /or discuss below.