Monthly Food Prices Spike Highest In 36 Years
March 16, 2011 Consumers experienced sticker shock last month as they visited their local supermarkets. According to the Department of Labor (DOL), food prices jumped by 3.9% in February, marking the largest monthly jump since 1974. This food costs increase was driven largely by a sharp rise in vegetable prices. Vegetable prices rose by nearly 50% due in part to freezes in Florida and Mexico.
The food price increase was reported as part of DOL’s Producer Price Index, which increased by 1.6% in February. This was double the rise of 0.8% in January. However, taking out the increases for food and energy, the core index only rose 0.2%, which is less than the previous month’s 0.5% rise.
Earlier in March, the Food and Agriculture Organization released its monthly report with similar spikes in food prices. The FAO Food Price Index (FFPI) rose for the eighth consecutive month, averaging 236 points last month, up 2.2% from January and the highest (in both real and nominal terms) since January 1990, the inception date of the index. Except for sugar, prices of all other commodity groups monitored registered gains in February, with dairy products and cereals climbing the most.
Meanwhile, energy prices rose last month by 3.3%. Gasoline prices rose by 3.7%. Factoring in the costs of fuel and energy in the production and transportation of food also can be linked to price increases.
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