AP
Food Costs Rising Fastest in 17
Years
Monday April 14, 4:10 pm ET
By Ellen Simon, AP Business Writer
|
Food Costs
Rising at Fast Clip, Squeezing Poor, Forcing Food Vendors to Explain Higher
Prices
He recently wrote a letter to his customers and posted it near the cash
register listing the factors -- dairy prices driven higher by conglomerates
buying up milk supplies, heat waves in Europe and
The owner of Steve's Authentic Key Lime Pies in
"I have to justify it," he said.
The
Higher prices for food and energy are again expected to play a leading role
in pushing the government's consumer price index higher for March.
Analysts are forecasting that Wednesday's Department of Labor report will
show the Consumer Price Index rose at a 4 percent annual rate in the first three
months of the year, up from last year's overall rise of 2.8 percent.
For the
"I was talking to people who make $9 an hour, talking about how they
might save $5 a week," said Kathleen DiChiara,
president and CEO of the Community FoodBank of New
Jersey. "They really felt they couldn't. That was before. Now, they have
to."
For some, that means adding an extra cup of water to their soup, watering
down their milk, or giving their children soda because it's cheaper than milk, DiChiara said.
In
Still, the higher
USDA economist Ephraim Leibtag explained the jumps
in a recent presentation to the Food Marketing Institute, starting with the
factors everyone knows about: sharply higher commodity costs for wheat, corn,
soybeans and milk, plus higher energy and transportation costs.
The other reasons are more complex. Rapid economic growth in
Soybean
prices have gone up as farmers switched more of their acreage to corn. Drought in
The jump has left people in the food business to do their own explaining.
Twin Cafe Caterers in lower
Wonder
Bagels, in
"The
major mills across the country are using words like 'rationing' and 'shortages'
if things continue," it said. "We will sweat out the summer together,
hoping there will be some flour left to purchase at any price."
The letter
called for an immediate halt to exports and a change in farm policy, "stop paying farmers NOT to grow crops." A new
farm bill, stalled in Congress, would expand farm subsidies if it passes,
however.
For some Americans, the resulting increases might be barely perceptible. The
Cheesecake Factory raised prices by 1.5 percent at the end of February,
Applebee's by 3 percent.
But for the poorest
"Now food stamps go fewer and fewer days of the month," she said.
The Food Bank recently got a letter of its own from a key vendor. Its grim
message: Sorry, but the prices they charge the Food Bank would be increasing 20
percent, due to food inflation.
http://biz.yahoo.com/ap/080414/inflation_squeeze.html?.v=4