The US government now says that food prices will rise 5.5% this year. The previous forecast was 4.5%. According to The Wall Street Journal "The forecast released Monday by the Agriculture Department is the third consecutive month the agency has raised its food-inflation forecast."
The numbers are almost certainly too low. The last figures available showed food costs rising at a .9% rate in the most recently measured month. That was the largest increase in almost two decades.
The litany of reasons that food is moving up is almost too long to number. Global need for food is rising as the population grows and as farmers in places like Africa are put off their land. Ethanol demand is increasing. In China the supply dislocation for good is moving costs up almost 20% per month.
Perhaps the Feds don’t want to sow too much bad news at one time. What they are not passing along to the general public is that there is now a "triple play" set up against the US consumer. He has to pay more, much more, for food. Fuel prices are soaring. And, banks will not pass out loans for home mortgages, cars or credit cards. If anything lenders are raising rates to mitigate risk.
Food prices may be bad, but in concert with other problems the consumer faces a terrible net of news.
Douglas A. McIntyre