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U.S. Food Prices Set For The Biggest Increase In 20 Years.

And the news keeps getting better.

U.S. consumers should brace for the biggest increase in food prices in nearly 20 years in 2008 and even more pain next year due to surging meat and produce prices, the Agriculture Department said on Wednesday.

Food prices are forecast to rise by 5 percent to 6 percent this year, making it the largest annual increase since 1990. Just last month, USDA forecast food prices would climb between 4.5 and 5.5 percent in 2008.

And you want to read something so sad it makes me cringe?

Americans spend more than $1 trillion a year on groceries, snacks, carry-out food and meals in restaurants. Farmers get 20 cents of the food dollar and the rest goes to processing, labor, transportation and distribution.

Now might be a really good time to learn how to garden so you can grow your own food next year!!


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Comments (10)

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  1. 20% isn’t that bad when you consider they receive subsidies and the growing cost of transportation. While I’m not saying farmers live like kings, it’s not “cringe”-level sadness. 🙂

  2. Kate says:

    Wow. That’s scary. I’m really, really glad I decided to drastically expand our garden this year. It is indeed a good time for more of us to grow some of our own food. I wouldn’t say I feel smug about it, when so many people are struggling to make ends meet. But let’s say that I like the feeling of greater food security, and the satisfaction of feeding my family from our own yard, *and* the significant savings in grocery costs. It has made a huge difference for us this summer. We’re hardly buying anything but dairy, pasta, and olive oil these days.

    It’s worth remembering that those of us who grow our own food are contributing a tiny bit of aid to the rest of the population that doesn’t garden, even if we don’t give away our surpluses. How? Well, the law of supply and demand, remember? When I grow enough food for my family, that’s a tiny bit of lessened demand on the market. If we could return to the sort of home gardening that was promoted during the World Wars (40% of all produce grown in the US was grown in home gardens), just think how much less demand there would be. It would certainly help mitigate the price increases.

  3. David says:

    It’s pretty bad though, and that’s why so many family farms are going under or having to sell out.

  4. Double says:

    It is not surprising that food costs are going up as inflation has reared its ugly head everywhere spurred on by rising fuel costs which are an expense component of just about everything that is made.

    Major lifestyle changes are coming and one of those changes will be more home gardens.

  5. Bellen says:

    Besides home gardening, including windowsill, container & sprouting, cooking from scratch is an excellent way to decrease the amount spent on food. It may also change your tastebuds. As comfort food, before Faye did not hit, I baked a pan of brownies (same recipe I’ve used for 25 years) and found them so sweet I froze half the batch. Now I have comfort food for the next weather disaster!

  6. […] Two Dollars:  US Food Prices Set For Biggest Increase in 20 Years.  Um… great.  […]

  7. marci says:

    don’t get the idea that all farmers get subsidies, because they don’t!

    Our rural county is mostly dairy herds for a famous Cheese…. there
    are NO subsidies going out here – and our farmers are hit by the same
    cost increases as others – especially the gas/fuel increases… it takes gas/fuel
    to feed the cows, bring in the hay, transport the hay, and get the milk to market.
    And while all those costs have gone up, the price the farmers are getting for their
    milk has Not gone up.
    It’s tough making a living farming these days – as it always has been.

  8. WealthBoy says:

    My wife and I have been going to the farmer’s market lately to cut down on our expenses on produce. Everything is fresh and less than half the cost at the grocery store. I hope that it is also putting more money in their pockets as well since we are buying more directly from the source.

  9. LC says:

    20% is actually quite good in comparison to the margins on most other household goods, even Fuel/Gasoline Companies are only making a 10% margin. Gasoline Station Operators are only making $0.05 per gallon on average. And everyone bellyaches about that profit margin.

  10. WealthBoy says:

    Assuming that the 20 cents on the dollar net income, then yes I agree that is an excellent profit margin. If it’s gross revenue then their net profit margin is likely to be considerably lower. I suspect it’s probably the latter, because 20% does sound like a high net profit margin for such a competitive market.

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