What Higher Food Costs May Do to Your Grocery, Dining Bills
While the surge in cost of eggs has stabilized and pork has become cheaper, consumers shouldn't expect a reprieve in the cost of beef.
Food prices have escalated gradually during the past 20 years and haven usually fallen in step with the rate of inflation at 2 to 3 percent, said Warren Graeff, the agriculture market manager for PNC, the Pittsburgh-based bank. The production of eggs were besieged in May by an avian flu, the first U.S outbreak, while beef producers will still face the effects of the drought in the western Great Plains in 2012 and 2013. These disruptions in supply affect producers, distributors and restaurant owners immediately, but consumers don't feel the effect for several months.
When the avian influenza spread across farms in many states, the supply of eggs was cut drastically by 10 to 12 percent to contain the disease, Graeff said. The shortage affected a wide range of businesses from family-owned restaurants that sell breakfast to companies that use egg whites to make mayonnaise, salad dressing and cake mixes. The adverse effect pushed prices to unprecedented uptick levels -- costing another 60 cents to $1 a dozen.
