Food Costs Rising Sharply

Costs Affecting Family Budgets

LABELLE, FL. -- The cost of food had gone up, yet again. Grocery costs have jumped 5.1% in 12 months, the latest in a string of increases. In fact, the nation is undergoing its worst grocery inflation since the early 1990s.

With a few exceptions, nearly every grocery category measured by the Labor Department, which compiles the official inflation numbers, has increased in the last year.

Milk is up 17%, as are dried beans, peas, and lentils. Cheese is up 15%, rice and pasta 13%, and bread 12%. No food product has gone up as much as eggs, jumping 25% since February 2007 and 62% in the last two years. If there is a silver lining in the food statistics it is that grocery prices did not increase as much in February (up 0.3% from the previous month) as they did in January (up 0.9%).

However, with farm prices remaining near record levels, food prices will likely not moderate in 2008. Instead, food inflation will likely be at least as high as in 2007, perhaps higher. Cereal and baking products will continue to increase because of steep prices for wheat; in fact, the price of cereal and bakery products increased 1.8% in February, the largest monthly gain since January 1975.

Economists say higher food costs are being caused by rising energy prices, a weak dollar that encourages exports of American crops and food products, and soaring prices for farm commodities like milk, corn, and wheat.