Americans who dug deeper into their pockets for groceries last year will face sticker shock again this year when shopping for food, experts said on Thursday.
"There's going to be real food inflation in this country," C. Larry Pope, president and chief executive of U.S. beef processor Smithfield Foods Inc., said at the U.S. Agriculture Department's annual outlook conference.
"I think we need to tell the American consumer that things are going up," he said in a speech. "We're seeing cost increases that we've never seen in our business."
He added that "overall retail food prices for 2008 to 2010 are expected to rise faster than the general inflation rate."
The spike in grains prices stems partly from the growing biofuels industry, especially manufacturers of corn-based ethanol.
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Food may be a relatively small percentage of the average American family's budget, but every small increase makes a difference, especially when more Americans are in debt. If the small amount of biofuels that are currently made make this much impact on food prices, the prices of some foods are likely to be outrageous if biofuels begin to be used more ubiquitously.
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