Food Costs Continue to Rise

U.S. consumers can expect to see their grocery bills continue to rise well into the fall as food companies pass higher commodity prices onto the consumer.

As reported by Bloomberg, costs for groceries and restaurant meals rose 3.7% in the 12 months ending June 2011—a period that saw rice, wheat, corn, soybean and milk reach the highest levels since 2008. Corn futures rose 76% in the 12 months through July 22; wheat 16%, raw sugar 71%; rice 65%; and meat 21%. Weather, rising oil costs and manufacturing costs all combine to create a perfect storm for continued inflation.

The world's population has increased 10% to 12% over the past decade, driving up the demand and cost for food commodities. According the a recent World Bank food pricing index, prices of food commodities increased 30% to 35% over 2010.