NEW YORK (MainStreet) — “Sticker-shock” may not be too strong a term to describe the reaction food shoppers have when they reach the register these days.
According to the World Bank, food prices climbed 10% in July.
More specifically, the organization reports that corn and wheat prices rose by 25% from June to July, while soybean prices rose by 17%. Only rice, which declined by 4% in price, is cheaper for consumers right now.
To the average U.S. shopper, higher agricultural prices are at best an inconvenience and at worst a real budget-strainer, especially for poor Americans. But the World Bank says higher food prices are also a hidden health issues, especially for children.
"We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices," World Bank Group President Jim Yong Kim says. "Countries must strengthen their targeted programs to ease the pressure on the most vulnerable population and implement the right policies."
Worldwide drought has been a factor in rising food prices, and global weather forecasts say next year should see more rain, raising crop levels and offering more hope to global consumers.
But that’s a year away, and agriculture experts say drought isn’t the only reason food prices are high – suggesting those prices should remain high at least through the year.
Aside from the global drought, St. Josephs University food marketing professor John Stanton says the agriculture food chain adds to high costs, as do global geopolitical events:
Food pipeline costs: “Price increases from the droughts are likely to have short-term effects, but global issues can have a longer and greater impact,” Stanton says, adding that demand is the biggest driver of prices.
“The biggest cost in a box of corn flakes isn’t the corn,” he says. “It’s everything from the price of oil to transport the product to the marketing and the packaging. So something like the cost of oil will have a much more lasting effect on the price of your cereal than the supply of crops.”