ANALYSIS
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Producers Quick to Pass Price Hikes Down Food Chain
Pricier grain, energy make everything more expensive, from cereal to meat
By Clay Dillow
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Posted Aug 8, 08 1:01 PM CDT
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(Newser)
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Soaring grain and energy costs are driving food prices skyward, and big producers are moving to pass price hikes down the food chain to consumers on everything from cereal to meat, the Wall Street Journal reports. And costs won’t likely decrease, with biofuel demand eating up more corn than ever and livestock herds being thinned in response to the higher price of grain.
With the supply of pork, poultry and beef expected to shrink by 5 pounds per person by next year, “American consumers should brace themselves for sticker shock in the meat case over the next 12 months,” one poultry producer says. And some giants, like cereal-maker General Mills, are downsizing their packaging, hoping less food at about the same price will keep consumers loyal.