4.Article Elasticity

In developed countries especially the us and europe

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Unformatted text preview: f the r eport. In developed countries especially the U.S. and Europe whe re meat and corn prices elasticity is low, the knock-off effe ct of high grain prices will be felt for some time to come. Chandler notes that the impact of higher grain and oilseed prices will be significant for the livestock sector as it is lik ely to be squeezed by higher feed costs. The long producti on cycles of livestock, notably cattle, will keep pressure on rising food prices as herds take the time to rebuild. The fu ll effect of this commodity price rally and the subsequent l ower meat and milk output, will be a multiyear rebuilding of herds, which will keep price levels high. Meanwhile, beverages and value-added product sectors will be less affected as grains and oilseeds constitute a smaller part of the overall production costs. The report estimates t hat the Food and Agric ultural Organization Food Pric e Inde x will rise by 15% by the end of June 2013. Rabobank expe cts prices particularly for grains and oilseeds to remain at high levels for at least the n...
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