Saturday, March 12, 2011

Global food inflation starting to hit U.S. grocery budgets harder

Food prices in the U.S. are rising at an accelerated speed. Checkout at the supermarket is getting more painful in the U.S. as need rises globally for key commodities used in food production. Source of article – Global food inflation starting to hit U.S. grocery budgets harder by MoneyBlogNewz.

Costs of food going up is a problem to deal with

There was a year-over-year increase of food inflation in January of 1.8 percent. The U.S. Consumer Price Index came out to state this. With the rising fuel prices and bad weather, the cost for many goods is going up. The need is increasing right along with it. So far, the impact of these factors has been most dramatic in meat costs. For example, due to tightening supplies, corn costs reached a 30-month high in January. Feeding livestock takes corn. That means it costs more to pay for livestock to live. More people in developing countries such as China and India want more meat too. There has been a 1.5 billion pound increase in beef exports in the U.S. This has happened in just five years time.

Average U.S. food costs

With the Global supply of meat, consumers in the U.S. have to bid against other countries. A year ago, the price for meat was down. In just that time, poultry costs have gone up 2 percent, beef went up 6 percent and pork went up 12 percent in cost. Rising Global commodity prices are also affecting other items in the food cart. There has been a huge increase in bread, milk and egg prices according to January CPI data. The price of wheat has gone up while the coffee bean went up 77 percent last year. That means cereal and coffee are now luxury items to buy. The 2011 expectations for pork are insane. There is anticipated to be a 10 percent increase in prices. Beef costs are expected to rise more than 7 percent. U.S. customers will be eating more chicken, which is anticipated to rise in cost a little more than 5 percent.

Perspective for price of food in 2011

Overall, U.S. food prices are anticipated to rise 3 percent to 4 percent this year, according to the U.S. Department of Agriculture. The idea that this inflation in food costs won't affect Americans is there. U.S. policy makers don't want to admit to the truth. The Senate Banking Committee heard from Federal Reserve Chairman Ben Bernanke last week who said that customers will have an effect that is "temporary and relatively modest" from the food inflation. The Fed doesn’t factor in food and energy costs when it calculates inflation, but more than 12 percent of after-tax income in U.S. households is now spent on fuel and food. Consumers aren't happy with the increases in costs. This is because unemployment is still extremely high while those who are employed are not having an increase in wages anytime soon. In 2008, the average taxpayer earned $33,000 a year, far less than two decades ago.

Information from

CNN Money

money.cnn.com/2011/03/08/news/economy/food_prices/index.htm” target=”_blank

Seeking Alpha

seekingalpha.com/article/256992-rising-prices-are-hitting-consumers-harder-than-the-fed-will-admit” target=”_blank

Agrimoney.com

agrimoney.com/news/meat—and-oil—to-lead-climb-in-us-food-prices–2903.html” target=”_blank



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