Why Are Food Prices Rising So Fast?

 

'If you do much grocery shopping, you have probably noticed that the cost of food has been rising at a very brisk pace over the past year.  So why are food prices rising so fast?  According to Federal Reserve Chairman Ben Bernanke, inflation is still very low and the economy is improving.  

So what is going on here?  When I go to the grocery store these days, there are very few things that I will buy unless they are on sale.  In fact, I have noticed that many of the new “sale prices” are the old regular prices.  Other items have had their packages reduced in size in order to hide the price increases.  But with millions of American families just barely scraping by as it is, what is going to happen if food prices keep rising this rapidly?'


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Farmers choose cotton over food crops

 

 From William Neuman in the New York Times:

“SPEARMAN, Tex. — 'Tight supplies of corn, soybeans and wheat have sent prices skyrocketing in the last year, prompting worries of a looming global food crisis.

In other years, American farmers have responded to high prices by devoting more land to staple food crops.

But this spring, many farmers in southern states will be planting cotton in ground where they used to grow corn, soybeans or wheat — spurred on by cotton prices that have soared as clothing makers clamor for more and poor harvests crimp supply.
The result is an acreage war between rival commodities used to feed and clothe the world’s population.

“There’s a lot more money to be made in cotton right now,” said Ramon Vela, a farmer here in the Texas Panhandle, as he stood in a field where he grew wheat last year, its stubble now plowed under to make way for cotton. Around the first week of May, Mr. Vela, 37, will plant 1,100 acres of cotton, up from 210 acres a year ago. “The prices are the big thing,” he said. “That’s the driving force.” '


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Food crisis benefits Goldman Sachs

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A Grim Record: One In Seven Americans Is On Food Stamps

 

'The number of people on food stamps keeps hitting new all-time highs; as of September, nearly 43 million people were using the program, according to figures out this week.

 

Of course, because of population growth, absolute numbers only tell part of the story. The best way to look at the numbers over a long period of time is as a percentage of the population. And when you do that, you see that we're also hitting new highs.' 

 

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Are Food Stamps the Soup Lines of this Great Recession?

Bloomberg notes that, as of 2007:

In Missouri, about 100 percent who were eligible [for food stamps] that year took advantage of the program, the highest rate in the nation, followed by residents of Maine and Michigan, at 91 percent and 89 percent, respectively ...

Things have gotten much worse since 2007.

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