Rising Food Prices Fueling Global Problems

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CHESAPEAKE, Va. - Tori Jones told CBN News that keeping food in her kitchen cabinets has not been easy.

"It's been hard, it's been really hard. We just try to cut back," she admitted.

Jones and her husband Eric said that higher prices for food, along with paying more to fill up their gas tanks, has put a strain on their family's food budget.

"She typically tells me do, 'You know how much the stuff cost today?" Eric said. "Sometimes it's like a few items we expect to be like $20 or $30. It'll be double that."

The Jones' said their monthly grocery bill has seen dramatic increase.

"Normally $300. Now easily $400 to $500," Tori explained.

In February, food prices jumped 3.9 percent, the biggest one-month jump since November 1974.

Not So 'Corny' Prices 

Chris Manns, with the Traders Group, Inc. in Chicago, said what happens with grain commodities like corn and wheat directly affect how much consumers will pay for things like cereal and bread.

He said cereal companies are likely to take advantage of consumers during this time.

"That box of corn flakes, that box of whatever, loaf of bread... they can now say, 'Look here, much like the gas stations, here we have this problem, we need to increase our prices," he explained.

According to the U.S. Department of Agriculture, the global demand for food has pushed corn supplies in the U.S. to their lowest levels in 15 years. Corn prices have nearly doubled in just the past six months, jumping from $3.5 a bushel to nearly $7.

Corn affects most food products in stores. It is used to feed cattle, hogs, and chickens that fill the meat aisles. It also sweetens most soft drinks and many other foods.

"It's as tight as it's ever been," Manns explained. "So any slight twitch or hiccup as far as any side of it goes and you eventually have a price spike."

Extreme Weather Impact

Economists list several reasons for the higher food prices. They point to recent extreme weather patterns like record snow storms and tornadoes in the U.S.

"It's just been weather problems everywhere," said John Mills, who owns a farm in King William, Va.

"And we're at a low level, we're not about to run out of corn, but the carry over is getting down to where we need a good crop this coming year," he said.

Freezing temperatures across southern states have prices for vegetables soaring.

Close to 75 percent of some lettuce crops have been damaged, causing the price for lettuce to increase. One school district in Kent, Wash., even had to suspend serving school salads four out of five days a week as a result.

"Fifty-one dollars a case for Romaine. That's very expensive," School district spokesman Tom Ogg said.

Texas is the biggest producer of cattle in the U.S but it is also the second largest winter wheat producer. The state is experiencing its worst drought in 44 years and as a result, much of its wheat crops have been damaged. Ranchers have had to reduce their cattle herds.

Dry weather from Oklahoma to Colorado may force cut crop yields.

The weather problems are not limited to the United States. In Russia, wheat crops have been devastated by the worst drought in half a century.

And in Australia, known for producing lots of meat, record floods have hurt output and sent global food prices soaring.

China has also been hit with severe weather problems, with the region's worst drought in 60 years threatening wheat crops. The Chinese government does not admit that there are any food supply problems.

Political Implications

Meantime, rising food prices have had political implications as well. In 2008, higher prices for corn, rice, and wheat sparked riots from Haiti to Egypt.

Earlier this year, food riots erupted in Tunisia and Egypt. Egypt is the world's largest wheat importer. Many there were protesting dramatic price hikes for basic food staples like rice, cereal, cooking oil, and sugar.

"Much has changed since 2008, year of the last global food crisis, and yet at the same time much seems to be so familiar," said Lazarous Kamambwe, president of the Economic and Social Council of the United Nations.

"In 2008, food riots erupted in 30 countries," he said. "In 2011 rising food prices combined with rising unemployment have also sparked riots and political unrest."

More People, More Demand

Dr. Robert Thompson, with the Chicago Council on Global Affairs, said the rising global population is also contributing to food shortages.

"We have to feed 78 million more people each year and the expansion of the middle class in Asia that means the demand for food is growing really fast," he said.

Thompson said the demand for food is growing faster than the world's supply of food.

"I project the demand for food will double in the next 40 years," he said. "And with only 10 percent more land to grow it on, with less water available to the world's farmers, I think we're likely to see continued long-term upward trend in commodity prices."

Cheap Food No More
 
Experts agree that higher prices and food shortages will continue for some time.

"I think the era of cheap food prices is over," Manns said. "Meat prices are going to go up and corn prices are probably going to stay up for at least two to three years."

The problem has forced many to start growing their own food. Families like the Joneses continue to look for ways to make ends meet.

"I'm a stay at home mom," Tori said. "I might actually have to get (a job) and maybe we depend on family members to help watch the kids if things continue to get out of hand."

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Charlene  Aaron

Charlene Aaron

CBN News Reporter

Charlene Aaron serves as a general assignment reporter and helps anchor for the CBN News Channel.  Follow her on Twitter @CharNews and "like" her at Facebook.com/CharleneIsraelCBNNews.