Newswise — “While global increases in food and feed commodities have been high, they won’t translate into a major increase in U.S. consumer prices.
“Soaring commodity prices do not translate into a soaring Consumer Price Index for food because commodities such as wheat make up only a fraction of the retail price. There is more cost for gasoline than wheat in a loaf of bread.
“Retail prices for commodities that do not require as much transformation from the farm to the consumer – such as milk, eggs and meat – will increase more than foods that require more processing, such as bread.
“Recent food price increases are not due to recent actions by the Federal Reserve or current fiscal policies by the U.S. and other countries. The increases in prices for commodities such as corn and wheat are primarily due to poor or extreme weather events in major food supply regions, continued demand increases in China and India, and the demand for biofuels which use crops such as corn.”
--Harry M. Kaiser, Professor of Applied Economics at Cornell University
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