What’s behind the surge in food prices? Many different things are coming together—you might say a “perfect storm.”
- Poor weather here and in Russia, China, and Brazil causing less grain production
- Less grain storage capacity in the United States and what storage space we do have is not full—so we have less supply on hand
- Crops used for biofuels instead of food
- Political unrest in many countries
You might think, “I don’t eat much corn, so why does the cost of corn cause food at the grocery go up?” Corn and soybeans are major components in animal diets; when corn prices rise, so does the price of beef, pork, poultry, milk, eggs, and cheese. Also, some farmers have cut back on their animal herds because of higher feed costs. It’s economics 101. When supply is short prices go up. Right now gas and diesel prices are also high, which make producing and transporting food more expensive.
Most economists predict food inflation. Some say inflation will be 2 to 3 percent, others say 4 to 4 ½ percent this year. Normal food inflation is about 2½ percent. Rising food costs will hit many families hard.
What to do? Learn how to get the most from your food dollar by planning, shopping and preparing food the smart way. That’s’ what the SpendSmart.EatSmart web page is all about. Take some time to browse through the pages and let me know what you find most helpful.
-pointers from Peggy