This infographic visually highlights the multiple factors that can influence agricultural markets and ultimately the prices consumers pay for food.

One of the worst U.S. droughts in 50 years is striking the Midwest, withering crops and sending corn and soybean prices to all-time record highs, and the extreme weather could last through harvest. According to the USDA, consumers can expect to pay up to 4 percent more for groceries next year as a result. Clearly weather is impactful, however it’s only one of the factors that affect the price of our food.

CME Group – Ensuring Effective Market Place

This infographic visually highlights the multiple factors that can influence agricultural markets and ultimately the prices consumers pay for food. Among these reasons is a growing global middle-class, particularly in China and India, resulting in increased demand for meat and grains. In fact, the U.N. estimates 50 percent more food will need to be produced by 2030 to meet these growing needs.

Effective markets are part of the solution to managing grain price volatility as a result of these factors behind food prices. Farmers use our futures markets to manage their price risk, and speculators play an important role in these markets. They take on that price risk in exchange for the opportunity to make a profit. In doing so, speculators are providing much-needed liquidity to hedgers and helping to discourage the swings in price volatility that might otherwise be much more severe without them.