The increased food prices facing Triangle residents are part of a global trend. Though there are many factors involved, it comes down to issues of supply and demand played out on several levels.

Michael Walden, professor of agricultural and resource economics, cites higher incomes of the growing middle class in developing nations such as India and other countries in Asia and Africa as the main reason for increased demand.

“It’s primarily a result of countries getting richer,” Walden said, describing how higher incomes affect the food situation. “People eat more and change their diet.” These diet changes include eating significantly more meat.

Geoffrey Benson, an associate professor of agricultural and resource economics, added that production of meat products necessitates growing grains to use as animal feed. As such large populations dramatically increase their food consumption, particularly of energy inefficient items such as beef or chicken, the prices will naturally increase in response.

“Production world wide is increasing but not at the same pace as demand,” Roderick Rejesus, assistant professor of agricultural and resource economics, said. Another significant factor in the global food price rise is the increasing price of petroleum, according to Benson. The cost of fuel used in crop production and transportation is partially passed along to the consumer.

“All of the food you see in the supermarket has some energy cost in it somewhere,” Benson said.

Even at the local level, high gas prices have made their presence felt in the farming community. Gene Lee, owner of L + G Farms, is one of those affected. “Driving cost $36,000 last year. I don’t know what it will be this year – at least $50,000,” Lee, whose farm is located in Johnston County, said. Lee also said the price of fertilizer has tripled. Fertilizer that cost him $350 a ton last year now costs $720 a ton.

Caroline Barefoot, a worker and cousin to the owner of Ronnie Moore’s Fruits and Veggies, mentioned the high price of tractor fuel. “A bunch of farmers have talked about how that’s hard on them,” she said.

However, some local growers, such as Charles Tart, owner of Tart’s Strawberry and Produce, are reluctant to pass on the additional cost to their customers. “Right now prices are about the same [as last year],” Tart said. Some North Carolina farmers are waiting to see what the financial result will be of the high oil costs. “It’s really too early to say,” Tart said. “Depends on how people respond.”

Senior Jody Clayton, a customer service clerk at Harris Teeter, said he did not think the price increases where causing customers to reduce their buying. “People are hungry,” Clayton, a natural resources major, said. “They come in and buy what they want.”

While local growers wait for returns, economic planning on the international scale is already taking effect.

“Beef cattle goes through a cycle roughly 10 to 15 years long,” Benson said. When market conditions are favorable, ranchers seek to increase the number of animals in their herds. In the short term, they use more of their animals for breeding purposes. “Last two years we’ve been at a high point in the cattle cycle,” Benson said, adding that the dairy industry operates on a similar cycle.

Environmental as well as economic factors have contributed to the scarcity of many grain products. Both Benson and Edmund Estes, associate head of N.C. State’s agricultural and resource department, cited the recent years of severe drought in Australia, which have significantly decreased the amount of wheat available to world populations.

In response to the threat of limited food supplies, Rejesus noted how several Asian nations with traditionally large export markets of rice are imposing limitations on exports in an effort to hold on to more of their rice for domestic consumption. Benson said this “panic” on the part of rice exporters has “made things worse for the world as a whole” by further decreasing supply and driving up costs globally.

Benson also explained why prices have risen so sharply as a result of the recent supply shortage. The amount of crops held in storage, known as stocks, has been unusually low in the past few years. Large stocks act as a cushion when global market conditions fluctuate.

“If you don’t have [large enough stocks], then prices become very sensitive and prices can shoot up very rapidly,” Benson said.

So what does the future hold for food prices?

“That’s the million dollar question,” Rejesus said.

The answer is uncertain. Some economists, such as Walden, believe that prices will not remain high. “There is some good news on the horizon. … Prices will be brought down by increased growing and people’s reactions to market forces.”

Other economists are less optimistic. “As long as oil prices stay as high as they are,” Benson said, “food prices will not come down, certainly not to where they were before.”

In addition to increasing the cost of production, high oil prices create a demand for biofuels, which divert farm land and food crops, like corn, away from food production. Benson said he sees this remaining a factor until the technology is sufficiently developed to make production of biofuels from non-food crops feasible.

While prices remain high, consumers have to make adjustments. “High prices are a signal to the buyer to change behavior,” Walden said. He recommends finding substitutes for expensive food items. Shoppers can purchase chicken instead of beef, or potatoes in place of rice. These purchasing strategies lessen the financial impact on an individual’s budget, and, according to Walden, avoiding high-priced goods can help bring prices down by decreasing demand.

Fortunately for Triangle residents, the United States is in a favorable position compared to many other nations. “The average American spends about 14 percent of their income on food, which is considerably less than many countries,” Walden said. In fact, the high prices and export restrictions create an opportunity for U.S. farmers. For example, Rejesus cites how demand for lower cost California rice may increase as Asian consumers make substitutions for more expensive Jasmine rice.

The concern many economists have with the rising prices is the situation it creates for people living in poverty. “The problem is the consumers, especially the poor consumers, will suffer,” Rejesus said. “That is where the crisis comes in.”

Walden said people in some African countries spend 50 percent of their income on food. Since poorer people have to spend a larger percentage of their income on food, Benson said, their limited resources do not stretch as far as they used to in light of the recent price increases. Aid organizations are now faced with more people to serve since more of the world’s poor are unable to purchase enough food for themselves, Benson said.

The organizations in turn are not able to buy as much food for victims with the same amount of funding as they were before to the price increases. Benson mentioned how requests for funding from charitable organizations have recently flooded his mailbox. “Obviously the people who are most affected by this are the poorest people in the world,” he said.