Consumers Could Face Another Ten Years of Increased Food Prices

 

During my weekly shopping trip, I was surprised to hear the local supermarket attendant notifying sweet old ladies in the produce section that they didn’t have any bananas available. “We have a few organic available, but there’s a shortage in Ecuador, which means there’s a shortage here,” he explained glumly.

This morning, I stumbled across this article over at MSNBC.com which seems to confirm the news across the world. It’s an international crisis happening around the world with the rapid increase in food costs.

From subsistence farmers eating rice in Ecuador to gourmets feasting on escargot in France, consumers worldwide face rising food prices in what analysts call a perfect storm of conditions. Freak weather is a factor. But so are dramatic changes in the global economy, including higher oil prices, lower food reserves and growing consumer demand in China and India.

One startling fact from the article states that according to the UN Food and Agriculture Organization, consumers face another ten years of increased food prices due to the recent shortages.

If you’re a food service owner and/or operator, and you’re not worried, you should be. When my husband and I were in discussions on whether to continue with our organic catering business or step back and determine our next direction before going forward, the increase in food costs were our #1 concern. Just as the article states, there seems to be a “perfect storm” brewing across the world, slowing food production and availability to a near halt.

What does this mean for the every day restaurant owner? Quite a bit. Most restaurants these days rely on national and international deliveries for their food stuffs. Decisions will have to be made at thousands of food service establishments around the world within the next year. To continue with the current menu, increasing prices as food costs increase? Or to adjust the menu and only utilize locally grown, locally available products? A wind of change is upon us.

2 Comments

  • Sandra Sims says:

    This situation has been a long time coming. High fuel prices are a leading factor in rising food costs at the grocery, restaurants, “discount stores” and elsewhere. I am curious to see how my (least) favorite big box, Wal-Mart, will try to keep “low prices.” Their business practices are scary enough as it is.

  • Thanks for providing the longterm analysis. The price of food should make the market interesting as consumers scramble to find affordable options.

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