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WATCH: How The Futures Market Helps Keep Your Grocery Bill Down

Processed foods generally don't experience price spikes.
Kristi Koser
/
Harvest Public Media
Processed foods generally don't experience price spikes.

At the grocery store, processed foods like cereal, crackers and candy usually maintain the same price for a long time, and inch up gradually. Economists call these prices “sticky” because they don’t move much even as some of the commodities that go into them do.

Take corn, for example, which can be a major food player as a grain, starch or sweetener.  

Corn prices can fluctuate widely, so why don’t products containing corn also see price changes? Why does your cereal pretty much cost $3 per box every week?

It’s partly thanks to the futures market.

Farmers use various tools to control the many risks in agriculture. Watching the weather influences when they plant or harvest. Buying crop insurance and selecting farm bill safety net programs helps protect them from crop devastation.

But they can also manage some of the threat posed by volatile market prices by participating in the futures market. The futures market helps both producers and users of a major commodity, such as corn, defend themselves against major prices changes.

Here at Harvest Public Media, we wanted to better understand how that works and how the benefits trickle down to regular food consumers.

Watch the video to check out what we learned.

Amy Mayer is a reporter based in Ames. She covers agriculture and is part of the Harvest Public Media collaboration. Amy worked as an independent producer for many years and also previously had stints as weekend news host and reporter at WFCR in Amherst, Massachusetts and as a reporter and host/producer of a weekly call-in health show at KUAC in Fairbanks, Alaska. Amy’s work has earned awards from SPJ, the Alaska Press Club and the Massachusetts/Rhode Island AP. Her stories have aired on NPR news programs such as Morning Edition, All Things Considered and Weekend Edition and on Only A Game, Marketplace and Living on Earth. She produced the 2011 documentary Peace Corps Voices, which aired in over 160 communities across the country and has written for The New York Times, Boston Globe, Real Simple and other print outlets. Amy served on the board of directors of the Association of Independents in Radio from 2008-2015.
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