Rising U.S. food inflation, now a 25-year high, is reminiscent of the 1970s and will continue for the next five years due to growing world economies, increased food demand and a sharp expansion of corn-based ethanol production, a top food economist said on Friday.
"What happened in the early '70s and what is happening today is that we have moved food input price to a new plateau. Ultimately, the consumer is going to have to absorb those increased costs," said Bill Lapp, president of Advanced Economic Solutions, who on Thursday released a study that looked at food inflation data going back to the 1960s.
Futures prices on the Chicago Board of Trade, the benchmark for commodity grain and soy markets, have risen to multi-year highs this year. Wheat hit an all-time high of $9.81-3/4 a bushel just on Friday. Soybeans on Friday reached over $11.60 a bushel, a price not seen since 1973, and corn rose to $4.37-1/4 in February, the highest level in a decade....MORE