U.S. consumers feel bite of growing Global food need

Will the rising price of food in the U.S. affect economic recovery? Greater competition globally for agricultural commodities is trickling down to U.S. customers in the form of more expensive groceries.

Problem with food costs

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. The price of goods throughout the world are going up with the bad weather, need and fuel costs increasing. Meat costs seemed to be affected by this the most. In January, corn costs went to a 30 month high since supplies are going down. The livestock price is increasing a ton since corn is used in livestock feeding. More people in developing countries such as China and India want more meat too. In just the last 5 years, the export on beef in the U.S. has gone up 1.5 billion pounds.

Average U.S. food costs

Other countries are starting to bid against U.S. consumers. The supply of meat is limited. Pork costs are up 12 percent from a year ago, beef is up 6 percent and poultry 2 percent. The grocery store costs are going up in other products too since commodity prices are increasing. January CPI data shows that costs for bread, milk, eggs and other staples are increasing significantly. Since the coffee bean costs went up 77 percent last year, coffee has started becoming more expensive while cereal isn't as cheap with increasing wheat prices. At the grocery store this year, pork costs are expected to raise the most, more than 10 percent. Over a 7 percent climb in beef costs is expected. The cost of chicken should go up over 5 percent since Americans should be eating more chicken.

U.S. food cost perspective for 2011

The U.S. Department of Agriculture points out that a 3 to 4 percent increase in U.S. food costs is expected this year. U.S. lawmakers are trying to act like the food inflation doesn't affect Americans. Last week Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that effect of food inflation on consumers will be “temporary and relatively modest.”. 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. The customers that don't have jobs and aren't getting raises are worried about these increases. The average taxpayer made $33,000 a year in 2008.

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