What Explains Agricultural Price Movements?
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After 2005, commodity prices experienced
their longest and broadest boom since World War II.
Agricultural prices have now come down considerably since
their 2011 peak, but are still 40 percent higher in real
terms than their 2000 lows. This paper briefly addresses the
main arguments on the causes of the agricultural price
cycle. It broadens the scope of analysis by focusing on six
agricultural commodities, and identifies the relative
weights of key quantifiable drivers of their prices. It
concludes that increases in real income negatively affect
real agricultural prices, as predicted by Engel's Law.
Energy prices matter most (not surprisingly, given the
energy-intensive nature of agriculture), followed by
stock-to-use ratios and, to a lesser extent, exchange rate
movements. The cost of capital affects prices only
marginally, probably because it not only influences demand,
but also evokes a supply response.
Palabras clave
FOOD PRICE, MARKET DEVELOPMENTS, MONETARY POLICY, UNCERTAINTIES, PRICE LEVELS, FOREIGN INVESTMENT, PRICE INCREASES, DEVELOPING COUNTRIES, COST OF CAPITAL, STOCK, ENERGY PRICES, MARKET DEVELOPMENTS, INFORMATION SYSTEM, SECURITY CONCERNS, PRICE UNCERTAINTIES, INCOME, INTEREST, PURCHASING‐POWER, COMMODITY PRICE, EMERGING ECONOMIES, INTEREST RATE, EXCHANGE, TREASURIES, DEVELOPING COUNTRIES, PRODUCER PRICES, FOOD PRICES, PRICE INDICES, FISCAL POLICY, EXCHANGE RATE, PRICE, MARKET FAILURE, SUPPLY SCHEDULE, PRICE TREND, ASSET VALUES, INTEREST RATE, TREASURY BILL, SUPPLY SCHEDULES, PRICE VOLATILITY, INFLATION, PRICE INCREASES, DEVELOPING COUNTRY, PRICE VARIATION, CENTRAL BANK, MARKET PARTICIPANTS, ASSET VALUES, PUBLIC POLICY, NATURAL GAS PRICES, PRICE INDICES, GLOBAL ECONOMY, INFORMATION SYSTEM, AGRICULTURAL COMMODITIES, CURRENCY, DEVELOPMENT ECONOMICS, EXCHANGE RATE MOVEMENTS, RESERVE BANK, EMERGING ECONOMIES, PRICE VOLATILITY, FOOD PRICE, INFLATIONARY PRESSURES, PRODUCTS, EXCHANGE RATES, INTEREST RATES, MARKET FAILURES, PUBLIC POLICY, NATURAL DISASTERS, DEBT, MARKETING, MARKETS, INTEREST RATES, BORROWING COUNTRIES, AGRICULTURAL PRICES, EXCHANGE RATE MOVEMENTS, SUPPLY SCHEDULES, PRODUCT, AGRICULTURAL PRICE, NATURAL RESOURCES, INVENTORY, AGRICULTURAL PRICES, COMMODITY PRICE, MARKET PRICE, PRICE INFLATION, EXPENDITURE, COMMODITY‐PRICE, CONSUMPTION, FEDERAL RESERVE, PRICE TRENDS, FEDERAL RESERVE BANK, POLICIES, VOLATILITY, MARKET FAILURES, FINANCIAL CRISIS, STANDARD OF LIVING, AGRICULTURAL PRICE, FUTURE, GLOBAL ECONOMY, VALUE, POLICY MAKERS, FOREIGN INVESTMENT, DEMAND, AGGREGATE DEMAND, NOMINAL INTEREST RATES, PRICE LEVEL, CONSUMER PRICE, PRICE CHANGES, INCOMES, PRICES INDEX, PRICE FLUCTUATIONS, EXCHANGE RATES, BORROWING COUNTRIES, FEDERAL RESERVE, DEMAND GROWTH, CEREAL PRICES, MARKET, ENERGY PRICES, POLICY, TREASURY, PRICE MOVEMENTS, INSURANCE, CURRENCIES, COMMODITY PRICES, ECONOMIC DEVELOPMENT, TRADE, MARKET FAILURE, NATURAL GAS, COST OF CAPITAL, SECURITY, STOCKS, INVESTMENT, COAL, SUPPLY, PURCHASING, INSURANCE MECHANISMS, COMMODITY MARKETS, POWER‐PARITY, FEDERAL RESERVE BANK, INVESTMENTS, CONSUMER PRICE INDEX, PRICE INDEX, PRICE OF COAL, NOMINAL INTEREST RATES, TOTAL DEMAND, COMMODITIES, EXCHANGE RATE, PRICE LEVELS, FOOD PRICES, PRICE MOVEMENTS, PRICE INDEX, FEDERAL RESERVE BANK, COMMODITY PRICES, COMMODITY, PRICES, ENERGY PRICE, COST OF CAPITAL, SUPPLY SCHEDULE, STORAGE