By Prensa Latina
London : Soaring food prices are already another thing for US citizens to worry about, says Money Morning, London-based online newsletter.
Overall, US retail food prices rose 4 percent last year, the biggest jump in 17 years, says the US Department of Agriculture.
They’re predicting another 3-4 percent rise this year, with eggs, chicken, beef and fruit all beating inflation over the past year in terms of price increases. Since January 2005 the average price of a loaf of bread in the U.S. has risen 32%.
Meanwhile restaurant owners have been even harder hit, with wholesale price increases of 7.4%. That’s the biggest jump in nearly three decades, according to the National Restaurant Association.
It’s no surprise that more and more Americans are turning to charity to keep their bellies full. America’s Harvest, which gives out almost two billion pounds of food and other grocery products every year to more than 200 banks across the US, says that its overall client base rose 20% in the fourth quarter of 2007.
“As financial markets have tumbled, food prices have soared,” said Robert Zoellick, the World Bank president in a speech last week.
Not the kind of thing you want to hear if you’re already struggling to pay the grocery bill. And the extent of the rise is shocking. Since 2005, “the prices of staples have jumped 80%”, he added.
India, Egypt and Vietnam have raised tax on rice exports in order to discourage its sale abroad, while a similar tax in Argentina on soybeans led to a three-week long farmer protest which just ended.
We are, as World Food Programme Executive Director Josette Sheeran said recently, facing a ‘perfect storm’. Rising demand from emerging economies, high fuel prices and increased risk of droughts and floods.
Then of course there’s the biggest bogey man of them all: biofuels.
The rivalry between bio-fuels and food production for agricultural land means that less acreage is being devoted to corn for food purposes.
US farmers expect to grow 86 million acres of corn for food this year, down from 93.6 million in 2007, as more and more farmers switch to the heavily government subsidized corn for ethanol industry.
“It’s a crazy strategy”, says Espen Baardsen, an analyst with Eclectica Asset Management. Any small shift in the weather this year, and the US will run out of corn.
McDonalds can claim to have done better than most. Indeed, last month the fast food chain announced that same-store sales, a comparison of the sales of stores open for a year or more, rose 11.7% in February.
The restaurant’s sales may be rising, but trying to keep the price of a cheeseburger at $1 a pop when beef and flour prices are on the up is no easy task, warns Money Morning.