World Food Prices at Dangerous High Levels

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World Bank President Robert Zoellick says global food prices have hit all-time dangerous high levels. It was bad news for Americans who are still struggling in the rebounding U.S. economy.

Around the world, high food prices could contribute to political instability and push millions in to poverty.

"We've had extremely strange weather patterns the world over where many crops have been destroyed," said Diane Swonk, a Mesirow financial economist. "We've actually seen a hit to the supply of food available."

Extreme weather patterns including droughts in China and floods in Australia, along with a higher demand for food, has pushed global food prices up by 29 percent in the past year.

People in the developing nations have been hit the hardest.  Some have to spend as much as half their income on food.

In the U.S., corn prices have risen almost 60 percent -- raising cereal and meat prices as well.

New retail sales numbers have shown weaker than expected economic growth. High energy prices are also to blame for the higher food prices, according to some economists.

"If you put prices at the pump together with prices at the grocery store -- that puts a lot of limits to what you can spend in our economy," Swonk said.

Zoellick predicts food prices will continue to rise. With many of the new year's crops not even planted, economists say relief could be months away.

"Nobody is going to bet on what sort of production we get in 2011 until we actually harvest it," said Abolreza Abbassian, the Food and Agriculture Organization's senior grains economist.

Clothing prices in the U.S. have also risen due to the spike in the price of cotton. Analysts said retailers could charge as much as 10 percent more when spring clothing lines hit the stores.

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CBN News
Heather Sells

Heather Sells

CBN News Reporter

Heather Sells covers a variety of issues for CBN News ranging from immigration and religious liberty to human trafficking, privacy issues and food.

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