Title: Why Are Food Prices So High?
Headings: Why Are Food Prices So High?
Why Are Food Prices So High?
Content: But that isn’t necessarily true anymore. Rising prices in the U.S. are
less driven by the economy here and more driven by the economic recovery and growth elsewhere. The result is a slowly recovering economy in the U.S. but higher inflation than usual. This, in turn, could require the Federal Reserve to take action to stem rising inflation by raising interest rates, and that could stagnate economic growth. This kind of situation with low economic growth, high unemployment, and rising prices is called “ stagflation ” and was last seen here in the late 1970s. Impacts from weather and natural disasters will ebb and flow over time and population growth will continue. But policy changes like ending ethanol subsidies, eliminating or moderating other crop subsidies, moderating regulation on herbicide use, eliminating food tariffs/taxes, allowing more water use for agriculture, etc. all could help lower food costs. Finally, actions to lower oil prices could help food inflation. It seems likely that, given all these factors, food price inflation will continue in 2012.