Over the last year, food prices have steadily inched upward, and it looks like that climb could get steeper. It’s visible even if you’re not coupon-clipping: A wonderful bakery I stopped at yesterday had raised prices because its organic flour suddenly became so much more expensive.
A couple of stories this weekend broke down the trend. As oil prices rise, there’s more demand for corn for ethanol and soybeans for biofuel. Since corn and soybeans are in animal feed, that sends up the cost of meat and dairy products. But there’s an important additional factor: The Chinese soybean crop this year was lousy, as the Chicago Tribune reported, so when buyers from China targeted soybeans the last few weeks, prices rapidly reached their highest levels in more than 30 years.
The net effect is that eggs are up 45 percent over last year at this time, and an official at the USDA says that price will likely be the new baseline; dairy products are up 15 percent. In addition, the world’s stockpile of wheat is the tightest since 1975-76, according to a Purdue agriculture economist. That’s partly due to “a shortfall in Australian wheat production,” according to the Atlanta Journal-Constitution.
Of course, many observers in the last few years have said that food in America is too cheap. But this isn’t just an American trend. The Tribune noted that the United Nations Food and Agriculture Organization said that “in September food prices around the globe were up about 37 percent from the same month a year ago. Basic foods such as bread, pasta, meat and milk are seeing the biggest jumps, it said.”