Soaring Food Prices: Worst Yet To Come
March 22, 2011
Over the past few months, consumers in America are witnessing higher prices for their daily food items. The concern is that this inflationary situation may only get worse in the days to come.
The Department of Labor Statistics stated that the producer price index soared by 1.6% in February 2011, following a 0.8% increase in January this year. However, economists expected the producer price index to grow marginally by 0.7 %.
The Producer Price Index (PPI) measures average changes in prices received by domestic producers for their output. Itprovides information on price developments from producer and is capable of providing future picture of inflation, since these prices in some cases tend to be passed on to consumers.
The US Department of Agriculture expects the average price of food in 2011 to be 4% higher than the previous year. According to some private forecasters, the month of December could see prices increase by as much as 6% over December 2010.
Food prices surged 3.9% in February this year, primarily attributable to the strong winter in some of the highly fertile Southern states, such as Florida and Texas .