Factors cited in rising U.S. food costs

March 11, 2011 at 1:48 PM   |   0 comments

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WEST LAFAYETTE, Ind., March 11 (UPI) -- U.S. food prices are being hiked by a triple whammy of shortages, Middle East turmoil and extreme weather in critical crop producing regions, an economist says.

Purdue University agricultural economist Corrine Alexander said Americans can expect to spend about 4 percent more for food this year than in 2010.

U.S. food price inflation has been on the rise since November 2009, she said.

"We're returning to a period of food price inflation after coming off a period where we saw food price deflation," Alexander said in a release Friday.

"We don't expect this to be a long-term, permanent higher food price period. We'll see these higher food prices until we rebuild global stocks of the primary crops."

Shortages in corn, soybeans and wheat have pushed prices to their highest levels this decade, she said.

"With higher grain costs, the biggest food inflation price impacts we expect to see are in the livestock area," Alexander said, predicting increases in the price of beef, pork and poultry.

Oil markets also are affecting food prices, she said, and while food companies have absorbed some of those price shocks they will have to charge more for their products should oil markets surge higher.

Finally, extreme weather has plagued crop production, with drought devastating Russia's wheat crop and storms battering the sugar growing industry.

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