Sticker Shock at the Supermarket: Food Prices Poised to Rise
October 15, 2009
Dan Burrows
DailyFinance
If there's any silver lining to a recession -- albeit a thin one -- it's that consumer prices typically go down. Make no mistake, deflation is a sign of a sick economy, but at least the net effect of cheaper prices for the basic necessities -- food, clothing and shelter -- helps folks get by when they are struggling to make ends meet
But consumers should brace themselves for things to change, especially at the supermarket. As the global and U.S. economies emerge from the downturn, economists predict that there is going to be some sticker shock at the checkout line. Food prices, they say, are heading higher and when you combine that with an unemployment rate that's expected to linger near a three-decade high for at least another year, it's even more unwelcome news.
The U.S. Department of Agriculture expects overall food prices to rise as much as 4% in the U.S. by the end of 2010. Yet, some economists think they could climb by as much as 5%. Even using the government's more conservative numbers, the price for eggs is forecast to rise 3% and beef is seen increasing 2%. Lamb, seafood and fish? All three categories are expected to jump as much as 5%.
A 5% boost in your grocery bill may not seem terribly devastating, but consider this: If you spend $300 a week on groceries now, you'll need to squeeze a raise of about a thousand dollars a year out of your boss (don't forget withholding tax) just to keep up with higher chicken, beef, pork and dairy prices. Good luck accomplishing that little feat with a 9.8% unemployment rate and companies looking into every nook and cranny in order to cut costs.
READ MORE http://standeyo.com/NEWS/09_Food_Water/091015.food.prices.2rise.html
Dan Burrows
DailyFinance
If there's any silver lining to a recession -- albeit a thin one -- it's that consumer prices typically go down. Make no mistake, deflation is a sign of a sick economy, but at least the net effect of cheaper prices for the basic necessities -- food, clothing and shelter -- helps folks get by when they are struggling to make ends meet
But consumers should brace themselves for things to change, especially at the supermarket. As the global and U.S. economies emerge from the downturn, economists predict that there is going to be some sticker shock at the checkout line. Food prices, they say, are heading higher and when you combine that with an unemployment rate that's expected to linger near a three-decade high for at least another year, it's even more unwelcome news.
The U.S. Department of Agriculture expects overall food prices to rise as much as 4% in the U.S. by the end of 2010. Yet, some economists think they could climb by as much as 5%. Even using the government's more conservative numbers, the price for eggs is forecast to rise 3% and beef is seen increasing 2%. Lamb, seafood and fish? All three categories are expected to jump as much as 5%.
A 5% boost in your grocery bill may not seem terribly devastating, but consider this: If you spend $300 a week on groceries now, you'll need to squeeze a raise of about a thousand dollars a year out of your boss (don't forget withholding tax) just to keep up with higher chicken, beef, pork and dairy prices. Good luck accomplishing that little feat with a 9.8% unemployment rate and companies looking into every nook and cranny in order to cut costs.
READ MORE http://standeyo.com/NEWS/09_Food_Water/091015.food.prices.2rise.html
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