By Natalie Vavricka, Nubella News
When you stroll through the supermarket these days, you might think your eyes are playing tricks on you. But according to the U.S. Department of Agriculture (USDA), it’s no illusion: Americans are seeing the worst food inflation in 17 years. In fact, retail food prices rose a whopping 4 percent in 2007 alone. Why such staggering increases? Read on as we uncover the reasons—and reveal the 7 most inflated foods in America.
Understanding Sticker ShockWhy is your grocery bill skyrocketing? Experts point to a variety of factors, including higher transport costs due to rising fuel prices, increasing global food demand, the weak dollar, speculation in the commodities markets, and a series of unfortunate weather events.
In addition, USDA economists cite dramatic increases in ethanol production. Ethanol, a gasoline fuel alternative, is made from corn or sugarcane, and when its production increases, the prices of these two commodities tend to rise in tandem. The resulting corn shortage has also produced an escalating demand for alternative grains, such as wheat and soybeans, making those crops more costly, too. According to the United Nations, global wheat prices have risen 130 percent since March 2007, while soy prices have risen 87 percent.7 Most Inflated Food PricesHow does all of this affect your bottom line? If the following items are on your shopping list, your grocery bill could be sky high.
1. Beans. They’ve always been considered a perfect food for people on a budget, but these days, beans aren’t quite the bargain they used to be. In fact, the Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) reports that the cost of dried beans rose 21.6 percent between March 2007 and March 2008.
2. Eggs. According to the CPI, the cost of eggs skyrocketed 18 percent from May 2007 to May 2008. What do these price hikes mean for you? While you could have picked up a dozen Grade A eggs for $1.45 in 2006, the same carton will cost you an average of $2.18 in 2008.
3. Dairy Products. It’s not easy when an entire food group is inflated, but such is the case with dairy products, which increased 11 percent overall from May 2007 to May 2008, according to the CPI. Which ones will make the biggest dent in your wallet? Cheese is up 14 percent, milk more than 10 percent, ice cream nearly 6 percent, and butter almost 4 percent.
4. Cereal. Since May 2007, increased corn, wheat, and energy prices have pushed production costs for cereals up 10.5 percent. According to the CPI, retail prices for cereal increased 4.4 percent in 2007 and are projected to rise approximately 8 percent by the end of 2008. In fact, after its fourth-quarter profits plummeted 17 percent in 2007, the manufacturer of Wheaties cereal announced that it would raise prices. Think a muffin might be an affordable alternative? Think again. The CPI indicates that baked goods are just as inflated.
5. Chicken. Soaring gas prices have caused a spike in the production of ethanol fuel, resulting in increased corn prices. Since corn is often the main component of chicken feed, the poultry industry has taken on the extra cost of feeding its animals—and passed along the price increase to you. In fact, the CPI shows that chicken prices increased 4.5 percent from May 2007 to May 2008.
6. White Bread. Among pantry staples, flour has seen some of the most dramatic price increases in recent years. In fact, the average cost per pound for flour was $0.34 in 2007 but rose to $0.42 by 2008. Not surprisingly, the cost of white bread is also way up, from a national average of $1.05 per pound in 2006 to $1.28 in 2008, reports the BLS.
7. Apples. You might assume that price hikes on poultry, dairy, and carbs may force Americans to start eating more fruit. Well, not so fast. The cost of fresh produce is also soaring, and one of the most inflated fruits is the apple. In fact, a pound of Red Delicious apples cost $0.96 in 2006; by 2008, it was up to $1.16.