Aggregate Food Demand and the Supply of Agricultural Products

Food demand may be somewhat more price inelastic than previously estimated. The simple four-equation model developed here provides a formal empirical framework linking food demand to supply. Medium-range forecasts indicate that food prices may continue to rise slightly faster than average prices for all items over the next 5 years. The model represents a middle-of-the-road approach to forecasting that may be more cost-effective than time-series or a multi-equation, multicommodity approach.