Saturday, September 4, 2010

The Rising Price of Meat

Meat prices are rising, and the reason is supply and demand. First there is an increase in the demand (consumption) for meat most likely due to increases in incomes in developing countries. Second there is not as much change in livestock inventories, thus supply is not keeping up with demand currently.

I suspect that as prices increase in the short-run that some consumers will switch to other food sources - such as increase the portion of vegetables in their diet, and I suspect in the long-run that livestock supplies will increase. Both of these forces will put downward pressure on meat prices.

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