The price of grain is now tied to the price of oil
Almost a third of the U.S. grain crop next year may be diverted from
the family dinner table to the family car as fuel, putting upward
pressure on food prices.
Recently corn rose to the highest prices seen in over 12 years on speculation that global demand for feed and biofuel will exceed production for the seventh time in the past eight years. World inventories of corn have fallen to the lowest since 1984 according to the U.S. Department of Agriculture.
Grain prices make up about 40 percent of the cost of poultry alone. Wheat prices that hit record highs in recent weeks and rapidly rising prices of other grains have left businesses from bakeries to breweries scrambling to find ingredients at prices they can afford.
So what does all of this mean to the U.S. Consumer? Higher food prices now with projections for higher prices over the next 12 months and beyond. Retail milk prices are up 30% over the same period last year, and eggs were up a whopping 40% compared with the same period. Meat, bread, cereals and beer are being hit. Even non-grain related products are seeing increases; with iceberg lettuce up 17%, over year ago levels. Consumers will continue to see larger grocery bills as the cost of energy continues to drive pricing in so many food industry channels.
According to GroceryGuide.com, "consumers may start to look at their food purchases as they do in their heating and transportation choices." While many families have chosen to downsize the family automobile in order to cut costs so now many may be looking for money saving alternatives in their grocery shopping. Paying attention to sales, using coupons, making a shopping list and planning meals around "what's on sale" may become as fashionable driving a hybrid fuel vehicle.
Read more:
The Associated Press
Bloomberg
GroceryGuide - The source for consumers
USDA
Recently corn rose to the highest prices seen in over 12 years on speculation that global demand for feed and biofuel will exceed production for the seventh time in the past eight years. World inventories of corn have fallen to the lowest since 1984 according to the U.S. Department of Agriculture.
Grain prices make up about 40 percent of the cost of poultry alone. Wheat prices that hit record highs in recent weeks and rapidly rising prices of other grains have left businesses from bakeries to breweries scrambling to find ingredients at prices they can afford.
So what does all of this mean to the U.S. Consumer? Higher food prices now with projections for higher prices over the next 12 months and beyond. Retail milk prices are up 30% over the same period last year, and eggs were up a whopping 40% compared with the same period. Meat, bread, cereals and beer are being hit. Even non-grain related products are seeing increases; with iceberg lettuce up 17%, over year ago levels. Consumers will continue to see larger grocery bills as the cost of energy continues to drive pricing in so many food industry channels.
According to GroceryGuide.com, "consumers may start to look at their food purchases as they do in their heating and transportation choices." While many families have chosen to downsize the family automobile in order to cut costs so now many may be looking for money saving alternatives in their grocery shopping. Paying attention to sales, using coupons, making a shopping list and planning meals around "what's on sale" may become as fashionable driving a hybrid fuel vehicle.
Read more:
The Associated Press
Bloomberg
GroceryGuide - The source for consumers
USDA
