Food Inflation

A visit to the grocery store any day of the week will confirm what is in the news all the time: food prices are rising all over the world and this trend is expected to continue. Normally, farmers in the U.S. could be expected to respond to rising prices by planting more of that particular crop (corn or beans etc) but this year there is little room to do so. That is because farmers have already expanded cotton production in response to rising cotton prices. So, food will cost more and so will clothes. These are obvious impacts. Less apparent but equally important are the changes in package sizing which skew the grocery bill. Producers and manufacturers are making package sizes smaller while continuing to charge the usual prices. A can of tuna might cost the same as ever but look closely and you will notice that there is less tuna in it. The consumer gets hit both ways: either the rising cost gets passed on as higher prices or we pay the same but get less in return. Another reason to follow the dictum: always, always read the label!!

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