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January 23, 2011

Researchers Bet on Food Prices over the Next Decade

Stan Becker

Stan Becker, PhD

At an event last October, marking the world’s population reaching 7 billion, Stan Becker, PhD, professor with the Johns Hopkins Bloomberg School of Public Health’s Department of Population, Family and Reproductive Health, and David Lam, PhD, president of the Population Association of America and a professor at the University of Michigan, challenged each other to a friendly wager over food prices during the next decade. The wager is unique because it considers the average inflation-adjusted index price of five foods that are monitored by the UN’s Food and Agriculture Organization. The winner will receive a maximum donation in the amount of $1,000 to the nongovernmental organization of his choosing.

“Although food prices have been rising in the last decade, the real price of food today is about the same as it was 50 years ago, in spite of the addition of 4 billion people,” says Lam. “World food production has grown faster than population throughout the period of the most rapid population growth the world will ever see.  While there are challenges in meeting world food demand, food production is extremely responsive to market forces and I believe food prices will fall in the coming decade, just as they did between 1960 and 2000.”

David Lam

David Lam, PhD

Becker disagrees: “The facts are that nearly all of the best land for agriculture is already being cultivated. Continued increases in yields per acre may be problematic in coming years, water for irrigation is increasingly in short supply, many fish stocks are already depleted, and the ratios of food stocks to food usage are quite low, so without a further breakthrough in agriculture or further utilization of marginally productive lands (e.g., further converting the rainforests to agriculture) or changes in food consumption patterns (e.g., a major trend toward vegetarian diets), there are likely to be shortages in food supply in the years ahead, which will cause prices to rise.”

The Becker-Lam wager is reminiscent of the Simon-Ehrlich bet, a famous wager between economist Julian Simon and biologist Paul Ehrlich over the market price of metals between 1980 and 1990. To determine the winner of the Becker-Lam wager, the researchers will average the food price index for meats, dairy, cereals, oils and fats, and sugars from 2011-2020 compared with the index from 2001-2010. Lam maintains that the price of these foods will go down, while Becker cites the problem of resource constraints such as limits on cheap water, oil and arable land as one of several factors that will contribute to increased food costs.

Media contact for Johns Hopkins Bloomberg School of Public Health: Natalie Wood-Wright at 410-614-6029 or nwoodwri@jhsph.edu.