Title: Why Are Food Prices So High?
Headings: Why Are Food Prices So High?
Why Are Food Prices So High?
Content: The interaction of different commodity prices also is interesting. For instance, the demand for corn and soybeans in China has pushed up the prices of eggs here in the U.S. The grain costs account for about half of the 23% rise in egg prices last year. The balance of the cost increase is due to fewer laying hens. The rising costs of grain for feedstock have increased prices on beef and pork. Advanced Economic Solutions, an economic research firm has predicted that beef prices will rise 12% in 2012. Food manufacturers are doing everything they can to cut costs and avoid price increases. These aggravate retailers who bear the cost of changing the pricing throughout their system and negatively affect consumer volume. As a result, many manufacturers who held off on increases have needed to take larger increases than normal to catch up resulting in sticker shock. For example, Kraft Foods raised prices 7.6% worldwide in the last quarter of 2011. Some people think that rising food prices are a good sign because historically this has meant the economy is recovering.