Food Prices On the Rise

The Lempert Report
April 01, 2013

Are Food prices heading higher?

Are Food prices heading higher? ?Using wholesale food prices as an indicator, The Food Institute projects that price inflation will rise into the second quarter of 2013, a cost that could ultimately trickle down to the retail side. ??These estimations are similar to those made by the USDA of 3% to 4% increases on an annualized basis for all of 2013.? As Rich Karlgaard from the Wall Street Journal states: “Food prices are rising faster than overall inflation. Inflation is the great hidden tax, especially when it hits essentials like food. Core inflation is? running at about 2%, but the U.S. Department of Agriculture predicts that food prices will be up 3%-4% in 2013 This will nip at Wal-Mart customers and? Wal-Mart itself, which now gets half of its U.S. revenue from groceries.? ?Despite costs increasing at the wholesale level since mid-2012,  U.S. food retailers so far been hesitant to pass along these increases to the consumer. ?But, the question remaining for not just Wal-Mart but all U.S groceries is… will they continue to eat the inflation? Or will they risk losing customers by passing these cost increases on to them?