Food Prices Hit New Record Highs and Grain Futures Jump after USDA Report

Food Prices Hit New Record Highs, Says UN Food Agency

Food markets are "already precarious", the UN says

March 3, 2011

BBC News - Global food prices have hit record highs, and could rise even further, according to the United Nations.

The UN's Food Price Index rose 2.2% in February to the highest level since the UN's Food and Agriculture Organization (FAO) began monitoring prices in 1990.

It also warned that spikes in the oil price could make the "already precarious" situation in the food market even worse.

Apart from sugar, the FAO said all commodity groups had risen in price.

Oil prices recently hit two-and-a-half year highs due to political unrest in North Africa and the Middle East. The FAO said the volatility in the oil markets was adding to an already difficult and uncertain situation.

"This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start," said the FAO's David Hallam.

The International Monetary Fund (IMF) said it was "extremely concerned" about the situation.

IMF spokesperson Caroline Atkinson pointed to the "impact on the poorest and most vulnerable, particularly in the low-income countries, but not only there".

The prices of cereals, such as wheat, rice and maize, have risen by 70% in the past year. This is largely due to droughts in eastern Europe and floods in Australia -- both major crop producers. The FAO said it expected world cereal production to have declined overall last year. In addition, it is also forecasting higher demand for agricultural products for food, animal feed and fuel production.

These conflicting pressures could push prices higher.

The FAO, however, said there were positive early signs that agricultural areas in Russia, Ukraine and Kazakhstan had begun to recover from last year's droughts and wildfires.

USDA Report Predicts Higher Grocery Prices in 2011

January 25, 2011

LA Times Blog - Get ready for bigger grocery store bills and larger restaurant checks.

The U.S. Department of Agriculture's Economic Research Service released its 2011 Consumer Price Index analysis for projections on food prices this week. Its findings: Food prices overall are going to increase 2% to 3% this year.

That price jump is expected to happen both at grocery stores and restaurants.

The inflation in food prices comes after a stretch of relatively low price increases in recent years. The agency’s all-food index showed a mere 0.8% increase between 2009 and 2010, and a rise of just 0.3% for food-at-home prices (the lowest food inflation rates since 1962 and 1967, respectively).

However, as commodity prices have jumped, and demand for ethanol increases amid growing energy prices, that all translates to higher prices for consumers in the grocery aisles.

One of the areas expected to be hardest-hit is meat, in part because feed prices surged last year. According to the USDA’s index, beef and pork prices were actually slightly down in December. However, beef prices were up 6.1% in December 2010 compared with a year earlier, while pork prices jumped 11.2% last month compared with December 2009.

Grain Futures Jump after USDA Report

January 12, 2011

MarketWatch - Grain futures jumped on Wednesday after the U.S. Department of Agriculture lowered its estimates for corn, soybean and wheat production for 2010. Corn for March delivery rose was up 30 cents, 4.9% to $6.37 a bushel. Corn production estimates were lowered to 12.45 billion bushels from the USDA's December estimates. Soybeans for March gained 70 cents, or 5.2%, to $14.27 a bushel. Wheat for March was up 60 cents, or 7.9% a bushel, at $8.20 a bushel.

U.S. Food, Farm Exports Could Have Record Year

Ag Secretary says US food and farm exports may have record year, could reach $135.5 billion

March 4, 2011

AP – Federal officials are expecting a record year for U.S. agriculture exports.

Agriculture Secretary Tom Vilsack says farm and food products are expected to reach a record $135.5 billion in fiscal year 2011, which ends in September.

Vilsack told The Associated Press that U.S. agriculture may have its best export year ever. Compared to fiscal 2010, export value is expected to grow 25 percent.

Vilsack spoke Friday in Tampa at the Commodity Classic, a large convention and trade show for the U.S. corn, soybean, wheat, and sorghum industries that draws some 4,500 farmers from around the nation.


To lower international food prices and protect our social interests, the Commodities Futures Trading Commission must use its authority to curb excessive speculation in commodities futures and re-establish strict position limits on speculators (which were successful until removed by the Commodity Futures Modernization Act of 2000). We must regulate and bring transparency to all trading. We can also removing damaging speculative influence on commodities prices by prohibiting participation in commodities markets by those who do not produce, manufacture, or take physical delivery of the commodities. We must create a solidarity economy that puts compassion and care for one another ahead of short-term profits, in the United States and around the world. [The world food crisis: what is behind it and what we can do, WorldHunger.org, October 23, 2008]