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Food prices will increase, eventually

Commodity prices are on the rise and one Purdue University ag economist says food prices are soon to follow. Corrine Alexander says while world grain stocks diminish and demand continues to grow, food prices did not significantly increase for most of 2009 and 2010. Alexander says rather than a question of if the grocery stores will raise their prices, it is when.

“Some of the big headline items where we’re seeing record prices are places like sugar and coffee, we’re also seeing very high prices for beef, corn and soybeans,” said Alexander. “So for all of these commodities it’s going to translate into higher food prices at the grocery store because these are the ingredients that translate into the foods we like to eat.”

She say the Consumer Price Index shows food prices have increased around 3.5 percent this year, with the largest increase in the food at home category. The CPI shows consumers are paying almost 5.5 percent more than a year ago. Food prices in restaurants are on the rise as well, just at a slightly slower tick. Consumers are paying just over 2.5 percent more when they go out to eat than they were at this time last year.