November 4, 2009
The News-Press, Tampa Bay
MYAKKA CITY — By the end of next year, the U.S. Department of Agriculture expects food prices to increase by as much has four percent.
Some economists think prices could climb as high as five percent, according to an article on DailyFinance.com. The price for eggs is forecast to rise three percent, and beef prices will jump two percent. Lamb and seafood are expected to see a five-percent rise.
Over a year, a four-percent increase on grocery prices can add up. The consumer who spends $150 a week on groceries will be paying an extra $500 over the entire year.
Economists say meat and dairy will see the steepest price increases at the consumer level.
The reason, according to food giant ConAgra former chief economist Bill Lapp, is pork, beef, chicken and dairy producers are all losing money. As they reduce supplies, that will cause prices to rise.
"In 2008, cereal grains led food costs higher. In 2010, it will be meat and dairy," said Lapp, who is now president of Advanced Economic Solutions, a consulting firm that specializes in analysis of food costs.
Dakin Dairy Farm in Myakka City is adapting to the change in the market with "agri-tourism."
On Oct. 31, the farm opened for its second year of tours, capitalizing on a market that loves going green and eating organic.
Instead of relying solely on dairy production in a down market, Dakin Dairy also bottles and sells milk locally, has a corn maze and sells items a its farm market.
Ethanol and other alternative fuels could also lead to price spikes at the supermarket.
In 2009, the U.S. will see record corn production, but more than a third of that will be diverted to ethanol production.
Cattle, chicken and hogs are fed corn and soybeans, which means cattle producers will need to raise prices to pay their own higher feedstock bills.
http://www.news-press.com/article/20091104/NEWS01/91104006/1075