Food Price Inflation: Causes and Impacts
"U.S. food prices rose 4% in 2007 and are expected to gain 3.5% to 4.5% in 2008.
Higher farm commodity prices and energy costs are the leading factors behind
higher food prices. Farm commodity prices have surged because (1) demand for
corn for ethanol is competing with food and feed for acreage; (2) global food
grain and oilseed supplies are low due to poor harvests; (3) the weak dollar has increased U.S. exports; (4) rising incomes in large, rapidly emerging economies
have changed eating habits; and (5) input costs have increased. Higher energy costs increase transportation, processing, and retail costs."