Falling commodities prices don't mean lower food costs
NEW YORK - As prices for crude oil and other commodities ease, consumers have gotten a small dose of relief at the gas pump. But don't expect less pain at the grocery checkout.
Food inflation is here to stay - and will probably worsen for some items.
That's because retail prices for cereal, eggs, cheese, and meat generally lag world prices for wheat, corn, and soybeans - the raw ingredients of so much of our food - by several months or longer.
"Food prices tend to go up pretty quickly and they tend to stick on the way down," said Jim Sartwelle, an economist with the American Farm Bureau, which tracks retail food prices on a quarterly basis.
That's bad news for Americans still struggling with high costs for fuel and household goods, and worse for people in impoverished countries like Haiti and Senegal, where violent food riots broke out this year as world food prices peaked.
In the United States, retail food prices have jumped on average 6 percent this year - triple the normal inflation rate of around 2 percent - as soaring demand for grains coupled with severe weather around the globe battered crops and sent world prices for rice, flour, and other staples soaring.
Food makers have dealt with the higher input costs in a variety of ways, from raising retail prices to shrinking boxes of cereal and bags of potato chips so they can sell less product for the same price.
But while easing prices for crude and other commodities have allowed retail gas prices to come down almost 10 percent from July highs, food prices have been more stubborn.