Forget About Gas Prices and Start Worrying About Food Inflation By Amanda Coleman Published Jun 19, 2007
Driving is an important necessity for most individuals and families, and the increase in the price of gasoline will continue to affect them.Many people have cut back on driving to unnecessary places and canceled planned vacations, in order to cut back on the use of gasoline. However, food is something that can not be eliminated, and the cost to feed a family is constantly rising.
Although food prices have only increased 3.7 percent over the past year, it is projected to jump to 7 percent by the year's end. The consumer has not really felt the burden of the cost increase yet because most of the food chains have not passed down the all food increase yet.
Although many items have been affected by the price increase, anything dealing with corn is being hit the hardest. Corn is used in the process of making ethanol fuel, and with need for ethanol increasing the need for corn will also increase. Simply economics explains that whenever a demand increases, the supply will decrease, and in turn makes the price increase. This increase is affecting cereals and oil along with many other house hold products. It will also affect the meat prices because corn is used to feed cattle and poultry.
Drought this year has hurt many farmers, which in turn hurts the consumer. This is proven fact with the price increase in the citrus fruit because of the Florida and California weather issues. If the farmers have a good season then the prices will go down for the consumer. "We should all hope we have a really good growing season this year," said Ben Senauer, co-director of the University of Minnesota's Food Industry Center.
The price increase in the grocery store can be seen a little in the egg and the bread department, but according to Wells Fargo & Co. agricultural economist Michael Swanson, currently there is no end in sight for the inflation on food. The whole market industry will be affected by this food inflation. Families will not be able to cut food out of the budget even though the prices will continue to increase. The families will have to cut other activities and leisure items out of the budget in order to accommodate this increase in spending money. So although gas price have increased a lot, they should not be America's biggest worry. America should be focusing on how to save money for the food inflation.
All information was obtained from The Post and Courier / Charleston.net: "Groceries taking big bite out of consumers' pocketbooks" http://www.charleston.net/news/2007/jun/18/groceries_taking_big_bite_out_consumers_pocketbo/
