Food Prices Predicted to Rise 2% to 3% This Year
Food prices are the highest they’ve ever been, and will get even higher, the United Nations’ Food and Agriculture Organization (FAO) reported earlier this year. The U.S. Department of Agriculture’s Economic Research Service released its 2011 Consumer Price Index analysis for projections on food prices this week: This year, food prices are expected to increase by 2% to 3%. Wenonah Hunter, Executive Director of Food & Water Watch, links the spike in food prices to the consolidation of our food supply as companies that produce such staples as dairy and beef have merged.
“This week’s release of the USDA 2011 Consumer Price Index analysis demonstrates that a more industrialized, consolidated food supply does not translate to lower grocery bills for consumers. I encourage the news media to look beyond the routine justifications of rising feed and fuel costs and take a critical look at the role consolidation of our food system plays in consumers’ rising food bills.
“Although all food prices are expected to increase in the coming year, inflation for beef, pork, eggs and dairy is anticipated to be sharpest. Not coincidentally, these are the same industries that have experienced the most consolidation over the past two decades and are controlled by the fewest number of large agribusinesses.
“While these largest companies claim that mergers and acquisitions allow for efficiencies of scale that create cost savings for consumers, the reality is consumers rarely see a decrease in what they pay for food. And, as the USDA’s latest CPI indicates, consumers are about to experience even higher prices that could increase inflation overall.”
In other words, any ‘savings’ created by large-scale agribusiness are not being passed on to us consumers. The swallowing up of smaller food providers is making our lunch (and breakfast and dinner) a lot more costly.
Beef prices were already up by 6.1% in December compared with a year earlier, today’s LA Times notes. Earlier this week, McDonalds announced that it is considering raising the price of some of its menu items, to offset the rising cost of beef:
Company representatives have reportedly said that the average price the fast-food chain pays for its most-used ingredients — such as chicken, wheat and cheese — could increase as much as 2.5% in 2011. And other leading packaged-food companies, including Kraft Foods Inc. and Sara Lee Corp., have warned consumers that higher prices are coming this year.
The price of a bagel went up at one of our local haunts last fall. My son is a teenager who won’t stop growing and every time I go to the grocery store (practically every day, lately), I wince when I see the total on the cash register—looks like we’re all going to saying ‘ouch’ at the grocery store and elsewhere very soon.
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