Changing food supply, demand, and marketing issues: What affects price and affordability?

Increasing food production and declining prices are a necessary, but not a sufficient condition to ensure food availability and affordability for all. The primary reason is that complex interactions between farmers, food distribution systems, and consumers influence availability and affordability of food. A systems perspective is useful to understand and address factors affecting global food supply and demand. Using this perspective, we examine the main trends and issues in food production, distribution, and consumption. Although food production has increased faster than population in the past, there is no consensus among researchers regarding future trends. Recent developments such as global warming, HIV/AIDS, wars, and biofuels may have substantial impacts on food availability and affordability in the future. The ability of the food-marketing system to make food available and affordable depends on the level of value added desired by consumers and by the costs of carrying out multiple marketing activities. Recent food marketing trends that are contributing to better performance of the food-marketing system include specialization in marketing activities, adoption of information technologies, economies of scale in food distribution, improved infrastructure, and better segmentation of the end consumer. In addition, factors shaping food demand that will influence food adequacy in the future include the pace of population growth, the distribution of the population across age groups, income level, income distribution, and geographic location (e.g., urban, rural). Three cases illustrate the complexity of relationships involved in the global food supply chain. The first case discusses the demand-driven livestock revolution and its links to changing diets, the second case explores critical links between the rising biofuels sector and food prices, and the third case describes the impact of modern food retailers on trade local supply chains in developing countries. We conclude with a discussion of policy alternatives to ensure adequate food for all.