Supermarket sticker shock: What to do about rising food prices?

The Associated Press

Bread prices are rising, along with other commodity prices.

Featured Topic | Posted 37 weeks 5 days ago

Supermarket sticker shock: What to do about rising food prices?

Bread prices have been rising for awhile. So has the price of corn, milk, meat and poultry. Now coffee prices are going up... again. A weak U.S. dollar that makes imported coffee more expensive and speculative investments in all commodities, including raw (green) coffee, wheat, oil and platinum, have sent prices skyward.

What should policymakers do to stabilize food prices? Can government ease the pain at the checkout counter?

Ben likes: Restore the dollar and change will follow

Larry Kudlow/Investor's Business Daily

The worldwide commodity boom in oil, metals and food is largely a function of the global spread of free-market capitalism and unprecedented international economic growth -- especially among emerging-market economies in China, India, Brazil, Russia and Eastern Europe.

Yet because the U.S. has neglected its currency, letting it drop lower and lower, good news on global growth is translating into bad news on U.S. inflation. Inflation is the single biggest cause of recession, and it may well be tipping the U.S. economy into negative territory. It's also the cruelest tax of all. Inflation robs consumer and wage-earner purchasing power. It erodes business profits. And the falling greenback is becoming a symbol of American decline. Folks are making fun of the dollar. Our enemies around the world are pointing to the unreliable dollar as evidence of American weakness.

Joel likes: A global need for grain that farms can't fill

David Streitfeld/New York Times

Many factors are contributing to the rise, but the biggest is runaway demand. In recent years, the world’s developing countries have been growing about 7 percent a year, an unusually rapid rate by historical standards. The high growth rate means hundreds of millions of people are, for the first time, getting access to the basics of life, including a better diet. That jump in demand is helping to drive up the prices of agricultural commodities.

“Everyone wants to eat like an American on this globe,” said Daniel W. Basse of the AgResource Company, a Chicago consultancy. “But if they do, we’re going to need another two or three globes to grow it all.”