Cheap food may be a thing of the past in U.S.
Americans spend only about 10% of their annual incomes on food, compared with asmuch as 70% in other countries, but with prices climbing, some economists wonderwhether the nation's abundance of affordable food is history.
By P.J. Huffstutter, Los Angeles Times4:46 PM PDT, March 16, 2011American consumers have long enjoyed a luxury thatfew others could boast: an abundance of affordablefood.But with prices of wheat, corn and other staples soaring,some economists and scientists are wondering how longthat can last.On Wednesday, the U.S. Labor Department reportedthat wholesale food prices jumped 3.9% in Februaryover January, the highest monthly increase in 37 years.Economists expect to see a similar uptick in whatconsumers are paying for food at retail when the Labor Department releases its consumer price index Thursday."Food prices have
been rising a lot faster, becauseunderlying costs have really shot up. You're seeing someingredients up 40%, 50%, 60% over last year," said Ephraim Leibtag, a U.S. Department of Agricultureeconomist. "When you see wheat prices close to 80% up, that's going to ripple out to the public."Economists warn that such prices will probably remain high this year and possibly much longer, driven by aconfluence of factors: the fall of the U.S. dollar, slowing growth in crop yields, political unrest in the MiddleEast, high crude oil prices and a revived interest in crop-based biofuels.Violent weather patterns, which some scientists blame on climate change, are compounding the problem.Recent floods in Australia devastated much of the wheat crop, while a drought threatened China's."We're not sure if these extremes in weather are the new normal," said Clive James, founder of the not-for-profit International Service for the Acquisition of Agri-Biotech Applications. "But the patterns we've seen inthe past few years show that this may become more the rule than the exception."Some commodity analysts said it was still too early to tell what the broader economic effect would be fromthe March 11 earthquake, tsunami and growing nuclear crisis in Japan. But they warn that the catastrophes,added to the turmoil in the Middle East and North Africa, could slow the economic recovery in the U.S.
Cheap food may be a thing of the past in U.S. - latimes.com http://www.latimes.com/business/la-fi-cheap-food-20110317,0,2260494,...1 of 3 3/17/2011 9:38 PM