Agflation is inflation linked to increasing agricultural prices to manufacture food and alternative fuels, which can outpace rising prices of other goods.

Share of consumer expenditure spent on food vs. GDP per capita

12-Month Percentage Change, Consumer Price Index, Selected Categories, November 2020, Not Seasonally Adjusted

Agflation describes the phenomenon when food prices rise more rapidly than the prices of other goods and services, due to the growing demand for crops as both food and for use in biofuels.
The word is a portmanteau of the words "agriculture" and "inflation."
Agflation occurs when food prices increase at a greater rate than the prices of other goods and services in an economy.
When agflation is high, a greater amount of household income is required for food and agricultural products.
While general inflation rates are commonly used to analyze the strength of global economies, the importance of agriculture makes agflation an essential aspect of measuring price trends.
Agflation occurs because demand increasingly outpaces supply, raising the price to "inflated" levels. Even when food crops are not used to manufacture alternative fuels, their prices may be subject to inflation because of the tendency of consumers to change their food buying habits. Although economists evaluate overall inflation by measuring prices using reports such as the Consumer Price Index (CPI), the impact of inflation differs in various global markets based on specific commodities. For example, if corn is in high demand to manufacture alternative fuels such as corn ethanol, food companies may switch to other less expensive feed grains, such as rice or wheat, to try to reduce costs for consumers. But food-related demand that shifts to other crops does not necessarily lower overall food prices.

Agflation

Agribusiness is the business sector encompassing farming and farming-related commercial activities. 

Agribusiness is the business sector encompassing farming and farming-related commercial activities. Key areas of concern for the use of drone technology remain the safety of drone operations, privacy issues, and insurance\-coverage questions.
Because agribusiness is a broad industry, it incorporates a wide range of different companies and operations. Some examples of agribusinesses include farm machinery producers such as Deere & Company, seed and agrichemical manufacturers such as Monsanto, food processing companies such as Archer Daniels Midland Company, as well as farmer's cooperatives, agritourism companies, and makers of biofuels, animal feeds, and other related products. Climate change has placed intensifying pressure on many companies in the agribusiness industry to remain relevant, and profitable, while adapting to the threats posed by large-scale shifts in weather patterns. Climate change has placed intensifying pressure on many companies in the agribusiness industry to successfully adapt to the large-scale shifts in weather patterns.

Agribusiness

The Agricultural Sector Investment Program (ASIP) was a World Bank development program for the agriculture sector in Zambia.

Zambia -- Agricultural Sector Investment Program (ASIP)

Under the four primary goals of the ASIP project, these countries would have seen legal changes and institutional improvements relating to food security, land usage, agricultural pricing, and export practices; as well as increased partnerships between governments and private firms. The Agricultural Sector Investment Program (ASIP) was a World Bank initiative designed to promote increased productivity in the agricultural sectors of several African nations. ASIP fell under the umbrella of the World Bank’s Corporate Advocacy Priorities and Global Public Goods Priorities programs, designed to foster productive coordination between the word’s business and public policy communities. Although the ASIP was not successful, the World Bank continues to provide low-interest loans, zero-interest credit, and a variety of grants to developing countries.

Agricultural Sector Investment Program (ASIP)

The corn-hog ration is a feed ratio used to determine the profitability of raising livestock.

Comparison of Porcine Epidemic Diarrhea Viruses from Germany and the United States, 2014

The corn-hog ratio is a calculation for understanding the economic opportunity in raising livestock, used to determine the profitability of raising hogs versus growing and selling corn feed. The corn-hog ratio is also used to help farmers determine the value of a crop of corn as compared to the value of a hog, which they would have to feed with the same crop of corn. The corn-hog ratio is used to determine the profitability of raising livestock, by calculating the price of a hog divided by the cost of the corn needed to feed it. The corn-hog ratio is a calculation for understanding the economic opportunity in raising livestock, used to determine the profitability of raising hogs versus growing and selling corn feed. The ratio is used to help farmers determine the value of a crop of corn as compared to the value of a hog, which they would have to feed with the same crop of corn.

Corn-Hog Ratio

Crop yield is a measurement of the amount of agricultural production harvested per unit of land area.

Crop Production Historical Track Records: April 2019

Crop yield is a standard measurement of the amount of agricultural production harvested—yield of a crop—per unit of land area. The U.S. Department of Agriculture (USDA) produces charts and maps displaying crop yields, crop weather, and crop acreage animations to help U.S. farmers maximize agricultural product output. Interestingly, for many products, the absolute low crop yield occurred in the 1930s during the time of the Great Depression and Dust Bowl years, while the absolute high crop yield occurred in the most recent years recorded. Crop yields, farm efficiency, and agricultural product output in the U.S. have increased dramatically over the past decades as technology has advanced in farm automation, crop genetics, fertilizers, and pesticides. Crop yield is a standard measurement of the amount of agricultural production harvested—yield of a crop—per unit of land area.

Crop Yield

The Dojima Rice Exchange was the world's first commodity futures exchange. It was established in 1697 in Osaka, Japan and dissolved in 1939.

Modernizing the Financial System in Japan During the 19th Century: National Banks in Japan in the Context of Free Banking

History: The World's First Institutional Futures Exchange: 'Dojima Rice Exchange

The Dojima Rice Exchange was a commodity futures exchange specializing in rice. During the 1950s, new commodities exchanges were established in Japan through the passage of the 1950 Commodity Exchange Law.﻿﻿ This led to the creation of the Osaka Grain Exchange in 1952, as well as the Kansai Agricultural Commodities Exchange in 1993. Although the Dojima Rice Exchange was dissolved in 1939, it is succeeded by the Osaka Dojima Commodity Exchange (ODE), which remains active to this day. The Kansai Agricultural Commodities Exchange exchange then went through a series of mergers, the most recent being the Osaka Dojima Commodity Exchange, formed in 2013. Founded in 1697 in Osaka, Japan, the Dojima Rice Exchange is considered the world’s first commodity futures exchange.

Dojima Rice Exchange

Pork bellies are the cut of pork that comes from the belly of a pig traded in the futures market.

Chicago Mercantile Exchange Inc. Delisted Its Frozen Pork Bellies Futures and Options on Frozen Pork Bellies Futures Contracts

A pork belly is the cut of pork that comes from the belly of a pig. Today pork producers and consumers still hedge some pork costs with CME’s lean hogs futures contract rather than pork bellies futures. While they were a major futures contract for decades, the declining popularity of pork bellies on trading platforms and bacon's growing year-round availability led the CME to a halt in trading in 2011. In addition to lean hog futures, other livestock futures traded on the CME include live cattle and feeder cattle futures. The futures contract in pork bellies pre-dates many financial futures contracts traded today.

Pork Bellies

Potash, from the Dutch potaschen, meaning pot ashes, is the common name for any of several compounds which are used in the manufacturing of fertilizer.

Potash is the common name for any of several compounds containing potassium, such as potassium sulphate (K2SO4), potassium-magnesium sulphate (K2SO4-MgSO4), potassium nitrate (KNO3), potassium carbonate (K2CO3), potassium oxide (K2O) and potassium chloride (KCl). Potash is the common name for any of several compounds containing potassium, such as potassium sulphate (K2SO4), potassium-magnesium sulphate (K2SO4-MgSO4), potassium nitrate (KNO3), potassium carbonate (K2CO3), potassium oxide (K2O) and potassium chloride (KCl). There is no substitute for potash as a fertilizer and the most common types used include:
Potassium chloride (KCl)
Potassium sulfate or sulfate of potash (SOP)
Potassium magnesium sulfate (SOPM) Farmers around the globe use potash and futures are available for potash, listed as potassium chloride. As the earth developed and the water receded, the salts, a mixture of potassium chloride (KCl) and sodium chloride (NaCl) were left behind, forming potash.

Potash

A soft commodity is a grown agricultural commodity such as coffee, cocoa, sugar, and fruit.

CME Group All Products – Codes and Slate

A soft commodity refers to futures contracts where the actuals are grown rather than extracted or mined. CME Group, for example, only lists coffee, sugar, cocoa, and cotton futures as soft commodities within the broader category of agricultural futures.﻿﻿ The Intercontinental Exchange (ICE), on the other hand, lists cocoa, coffee, sugar, cotton, and orange juice with additional grains and agricultural products underneath the soft commodity category. Cocoa is traded in dollars per metric ton and one contract is for 10 metric tons, so when cocoa is trading at $1,500/M ton, the contract has a total value of $15,000.﻿﻿ If a trader is long at $15,000/M ton, and the markets move to $1,555/lb, that is a move of $550 ($1,555 - $1,500 = $55, and 55 x 10 M ton. = $550). Soft commodities are sometimes referred to as tropical commodities or food and fiber commodities. It is also traded in cents per pound, so if the market is trading at 53 cents per pound, the contract will have a value of $26,500 ($0.53 x 50,000 pounds = $26,500).

Soft Commodities Trading

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Terms in Soft Commodities Trading