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Agriculture Today


What’s fueling food prices?




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May 4, 2011 | 3,091 views | Post a comment

WACO -- Consumers can expect to pay 3 percent to 4 percent more for food this year, according to the Consumer Price Index (CPI), and experts say the sudden increase is tied to a sharp rise in fuel costs and commodity prices, among other factors.

Fuel prices are a major component of food production. Nearly half of retail food price increases (44 percent) come from fuel, transportation, and energy costs. Comparatively, raw farm products contribute less than a third (29 percent).

Rising fuel prices affect every stop in the food production chain, starting in the field where the crops are grown. Farmers and ranchers are paying more for basic business inputs like diesel to power equipment and fertilizers that foster plant growth. Manufacturing and processing facilities also must account for the rising cost of fuel.

Commodity prices also have been increasing, due to rising global demand and recent supply disruptions around the world. Although the costs of raw farm products are higher, processed foods are more likely to post noticeable price increases.

Ultimately, food prices are expected to level out, and consumers can expect to pay only slight increases over the long term. As for the men and women who grow our food, they will continue providing the fresh produce, grains, and dairy products that stock our grocery store shelves, while trying to maintain profitable and lasting businesses.

The Texas Farm Bureau works to provide a voice for Texas farmers, ranchers, rural citizens, and everyone interested in preserving and protecting this way of life. Visit www.txfb.org.
 

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