Running a grocery store makes this very evident
From the Chicago
Sun-Times:
Food prices jump most in 36 years, from beef to eggs to butter
If you�re feeling sticker shock from higher grocery prices, it�s not your imagination, and no relief is in sight.
Wholesale food prices spiked 3.9 percent in February from January, the biggest jump in 36 years, the Labor Department said Wednesday.
Most of the increase was because of a sharp rise in vegetable costs, but meat and dairy prices also jumped. Harsh winter freezes in Florida, Texas and other Southern states damaged crops, driving up vegetable prices. Meanwhile global prices for corn, wheat and soybeans have risen sharply in the past year. That has raised the price of animal feed, pushing up the cost of eggs, beef and milk at the wholesale and consumer level.
Corn prices are up 59.4 percent from last year. Wheat is up 81 percent, and soybeans are up 29 percent, said Ephraim Leibtag, deputy director for research at the U.S. Department of Agriculture�s Economic Research Service.
The USDA forecast says consumer food prices will rise 3 to 4 percent this year.
The wholesale price report comes ahead of a Labor Department report on consumer prices, due out today, forecast to show overall prices rising 0.4 percent in February. The January report showed sharply higher year-over-year price increases for several foods, including citrus fruit, up 10.6 percent; pork, up 9.9 percent; ground beef, up 9.9 percent; coffee, up 4.9 percent and potatoes, up 5.9 percent. Those increases preceded the recent run-up in oil prices that drove gasoline prices higher amid unrest in Egypt and Libya. The higher energy costs will also affect grocery prices, Leibtag said.
�We have seen higher oil prices. Not all of that has come through yet. There�s still more to come,� Leibtag said of grocery price increases.
Three major factors are at play. For dry commodities like corn, there is speculation in the market. There are also Federal subsidies to prop up the stupid ethanol program.
Next up is the increased fuel costs from the tractors to the delivery vans.
At our store, we are being hit with increased freight surcharges above and beyond our food costs.
Finally, this is another effect of Quantitative Easing. Much of our produce comes from Mexico and the Peso is a lot stronger against the Dollar. Not because the Peso is strong but because the Dollar is very weak. We are printing money like it's going out of style and this is showing up loud and strong in the international marketplace.
Posted by DaveH at March 31, 2011 5:19 PM