Household Budget: Bread and Pasta Prices Likely to Remain High

If you’re like me, it’s time to make an adjustment in the monthly budget. The dairy that we use is announcing increased prices on milk, cheese and eggs. And the fuel surcharge for delivery has gone up. Again. Not that we mind that much. After all, we like supporting local businesses — especially those with sustainable practices. But it does mean that we’re making adjustments.

But we’ve noticed a change at the grocery store as well. Food costs more. And we all heard about that panic-induced trend to hoard rice a few weeks ago. (Disclosure: I did not hoard rice. There is nor reason to, since the US is not experiencing a rice shortage.)

So is wheat the next target? Probably not. In fact, the wheat harvest is likely expected to be very good this year. But that isn’t changing the rate of food prices inflation on items like bread and pasta. Why is this? Wheat prices are dropping, and the harvest should be abundant.

The answer is in other issues. Harvesting wheat requires energy. And all the steps in between — the steps that take wheat and turn it into flour for bread and pasta — take energy as well. And energy prices are going up. Then you have to transport the food to wherever it is going. So that adds to the cost.

So, it is time to accept that, right now, even with economic stimulus tax rebate checks on the way, it is time to think about what you are spending your money on. Because more of it is going to be spent on food.
image credit: US government