Americans are noticing higher prices at the grocery store, and it's about to get worse. Food prices at the wholesale level rose last month by the most in 36 years. Cold weather accounted for most of it, forcing stores and restaurants to pay more for green peppers, lettuce, and other vegetables, but meat and dairy prices surged, too. Food prices rose 3.9% last month, the most since November 1974.
At the same time, global prices for corn, wheat, soybeans, coffee, and other commodities have risen sharply in the past year. That's raised the price of animal feed, which has pushed up the cost of eggs, ground beef, and milk. Paul Ashworth, an economist at Capital Economics, says his firm has warned since last summer that spikes in commodity prices would eventually work their way down to wholesalers and consumers, "and here it is. There is plenty more to come over the next few months."