The Consumer Price Index (CPI) measures the average change over time in the market price that consumers pay for certain household goods and services. Overall, the index rose 0.5 percent in March on a seasonally adjusted basis – but the food index, including food at home and away from home, was up 0.8 percent. Gasoline and food prices together accounted for nearly three-quarters of the March index rise.
Commodities prices have surged in recent months, prompting concern that there could be a repeat of the price spikes of 2008, which led to food shortages and riots in many parts of the world.
However, although the US Department of Agriculture (USDA) has forecast the CPI for food to rise 3 to 4 percent by the end of the year, it has noted that the CPI inflation for food in 2010 was at its lowest level since 1962, rising only 0.8 percent over a two year period, despite volatility in food commodity markets.
Paying more for groceries
Food eaten away from home rose 0.3 percent – its largest increase since September – but the CPI report noted that grocery prices are outpacing restaurant price rises. Prices increased at all six major grocery store food groups in March, the report said, with increases ranging from 0.5 percent for cereals and bakery products to 1.9 percent for all fruits and vegetables.
The fresh fruits and vegetables sector saw a 4.7 percent increase, on the heels of a 6.7 percent increase in February, with tomatoes, potatoes and lettuce rising ahead of other produce. The index for dairy was up 1.3 percent, while for meats, poultry, fish, and eggs it rose 1.1 percent.
Over the past year, food at home has risen 3.6 percent with the index for meats, poultry, fish and eggs up 7.9 percent.
Although food price rises will undoubtedly affect Americans, particularly in the current economic climate, rising food prices are likely to have less impact on Americans than elsewhere in the world, according to market research organization The Nielsen Company. It says that food represents 6.9 percent of average household expenditure in the United States, compared to more than 11 percent for the average Austrian household, 15 percent in South Korea, and 45 percent in Pakistan. Per capita, that translates as $2,208 in the United States, $2,860 in Austria, but just $309 in Pakistan.