Food May Be Cheaper in 2010, Or Not

Over the past two years economists have observed food prices rise for both grocers and consumers as a result of high energy and commodity prices. Then came the recession and drop in oil prices and the cost for many food items fell as well.

Now, as the Wisconsin Ag Connection reports, "economists are predicting that food prices will increase only slightly in 2010 and may even drop for some." The US Department of Agriculture projects a 2.5 to 3.5 percent decrease in total food costs. Yet, food costs at the grocery store are projected to rise by 2.5 to 3.5 percent. "Restaurant prices are expected to continue to fall." According to the Wisconsin Ag Connection, the American Farm Bureau Federation is making similar projections.

From the 1990s to 2006, grocery shoppers enjoyed good prices as the growth of their personal income outpaced the increases in food prices. This ended in 2007 when fuel prices started to increase. According to the Consumer Price Index, during 2007 and 2008 grocery store "prices rose 4.2 and 6.4 percent [.]"

Perhaps the real question in this recession should be whether or not people's incomes and job creation will make it a little easier for families to put food on their tables?

To read the Wisconsin Ag Connection story click here.

Posted: 02/17/10