LCSN: Will food costs continue to rise?

May 29, 2011. Retrieved online June 1. 2011 from AUTHOR, Las Cruces Sun-News

LAS CRUCES — Every Memorial Day, I try to find time to take the kids to the cemetery, look at the flags near the headstones and remind them why we have this holiday. Then, I like to retreat to the homestead, twist the top off of a cold beer, fire up the grill and turn on a baseball game. I figure that makes for a truly American afternoon.

But a symbolic, if not literal, black cloud might shadow some of Monday’s festivities. If the day remains bright and sunny, we might be tempted to thank Mother Nature for the good Memorial Day grilling weather. But she’s also responsible for some of the grumbling we’ve done at the cash register as we stocked up on food.

Here’s what we know:

— Drought, especially in China, could boost wheat prices around the globe, the United Nations reports.

— The Farm Bureau tells us that as much as 40 percent of this year’s rice crop in the U.S. has been affected by flooding.

— Corn prices rose last week on concerns that heavy rains could hurt this year’s harvest.

— High gas and energy costs will naturally drive up prices on the shelves. (And don’t forget the packaging food comes in. A lot of plastic uses petroleum products and, after all, the milk carton is not provided for free.)

A summer of rising food costs will definitely hamper any positive momentum the economy might have.

“(High prices) squeeze other consumer purchases,” said Jim Peach, who teaches economics at New Mexico State University. “Energy and food, both of those are essentials. That squeezes discretionary spending. It’ll shift people from brand name to generic foods and from high-end items.”

The U.S. Commerce Department reported Friday that consumer spending increased in April. Good news? Not really. People are spending more because energy and food cost more.

Check this out: If you can’t survive without that morning cup of joe, the national average price for a pound of coffee in the U.S. went from $3.64 a year ago — as of April 30 — to $5.10 this year, about a 30 percent jump. According to the U.S. Bureau of Labor Statistics, the national average price of ground beef, whole chicken, whole milk, tomatoes and other items have risen in price from last year also.

Read the Las Cruces Sun-News article.


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