Higher fuel prices are making it expensive to grow crops and get them to retail markets. Corn inflation has turned meat prices higher and bread (grain) is experiencing rising costs as well.
According to Karen Robinson Jacobs for the Dallas Morning News, many analysts are expecting consumers to keep paying higher prices for food, which accounts for 13% of household spending. After all, people gotta eat. The Department of Agriculture forecasts food prices will rise 4% this year alone.
But that means that while consumers spend more on food, they’ll have less disposable income. Consumer spending is what drives the economy. Without that, it’s just wheel-spinning.
The growing middle class in China and India means more people will be eating meat while the Australian drought has narrowed grain and dairy exports to Europe and Asia, cutting the global supply and causing more countries to turn to the United States for food.
To access the rising cost of a trip to the grocery store, look at these funds: