With the help of an appropriate diagram and the information in Extract B, explain how rising incomes in emerging economies have affected the global price of maize.

Extract B: Crucial links between meat production and grain markets

Global grain markets and livestock markets have become increasingly interrelated in recent years. Changes in livestock markets directly affect agricultural grain markets, illustrating key economic concepts such as derived demand and composite demand.

One major link between livestock and grain prices stems from the growing global demand for meat. Animals like cattle, pigs, and poultry require feed, which is primarily produced from staple crops. Crops such as maize (corn) and soybeans, which have traditionally been used directly for human dietary needs, are now heavily demanded as raw materials for animal feed production.

Rising household incomes in rapidly developing nations, such as Brazil and China, have led to a dietary shift toward higher meat consumption. This surge in meat production has led to a massive increase in the demand for livestock feed, diverting maize away from direct consumption and driving up its global market price.