Reference no: EM131640697

World market prices for major food commodities such as grains and vegetable oils have risen sharply to historic highs of more than 60 percent above levels just 2 years ago. Many factors have contributed to the runup in food commodity prices. Some factors reflect trends of slower growth in production and more rapid growth in demand, which have contributed to a tightening of world balances of grains and oilseeds over the last decade. Recent factors that have further tightened world markets include increased global demand for biofuels feedstocks and adverse weather conditions in 2006 and 2007 in some major grain and oilseed producing areas. Other factors that have added to global food commodity price inflation include the declining value of the U.S. dollar, rising energy prices, increasing agricultural costs of production, growing foreign exchange holdings by major food importing countries, and policies adopted recently by some exporting and importing countries to mitigate their own food price inflation. The US commercial farming industry is capable of producing enough food to feed the world. However, the US farming is trying to balance its corp production to meet world demand for biofuels like ethanol. Since it can not produce more food for export without sacrificing lucrative biofuel crops, what are the key factors commercial farmers should consider when determining what they should produce? In other word, should revenue/profit always be their first priority?