According to the Bureau of Labor Statistic's most recent Consumer Price Index report, consumers saw a price increase of 2.8% during the the last yearly period for food bought at grocery stores. This "food at home" component includes grocery staples such as milk, bread, vegetables and meat. World economic growth, rising crude oil prices, shrinking stockpiles, strong commodity demand and severe crop-destroying weather have created a perfect storm of sorts, resulting in rising food costs worldwide. In fact, the global food price index, compiled from price data for sugar, cereals, oils, meat and dairy products, recently reached a new, all-time high. While the effects of increased food costs are felt everywhere, from the school cafeteria to our favorite restaurants, here are five staples that cost more at the grocery store. (Inflation is often a consequence of economic recovery. Here's how you can protect your financial portfolio. Check out Fight Back Against Inflation.)

TUTORIAL: Budgeting Basics

Corn is partially to blame for rising meat costs. The price of corn has doubled in the past year, driving up the price of livestock feed, which results in higher prices for meat. Supply and demand factors are affecting prices as well, where strong demand for cattle and hogs has been tempered by a weak supply, further driving prices upward. Cattle herd sizes, for example, are at their lowest levels since the 1950s. Retail meat prices have risen more than 7% in the last year, according to the Consumer Price Index. Consumers can expect to see prices increase for certain cuts of meat, including short ribs, hamburger and high-end cuts like filet mignon. Cattle futures on the Chicago Mercantile Exchange recently closed at an all-time high of $1.1752 per pound.

Rising incomes in developing nations increase the global demand for dairy and meat products, according to an annual outlook from the Organization for Economic Cooperation and Development and the United Nation's' Food and Agriculture Organization. Data from the Dairy Export Council indicate that milk shipments surged 63% last year, and cheese exports are at an all-time high. Increasing feed costs also affect the price of milk and dairy products as farmers face record costs for raising dairy cows. Dairy prices have climbed by 15% last month, and milk futures, traded on the Chicago Mercantile Exchange, rose more than 50% in the past year. Cheese is trading at prices not seen since 1984.

Fresh Produce
Bad weather - droughts, floods, hail and freezing temperatures - impact the costs of fresh fruit and vegetables. Earlier this year, farmers in parts of Mexico and the southwestern United States were pounded by catastrophic crop losses following the worst freeze in 60 years. Florida again was hit with a late freeze, destroying 60-70% of its tomato crop. As a result of these late freezes, produce prices have doubled in some cases. The tomato situation became so dire that some fast food restaurants were forced to temporarily eliminate tomatoes from their sandwiches, or make them available only upon request. (Inflation is less dramatic than a crash, but it can be more devastating to your portfolio. See Coping With Inflation Risk.)

Corn prices doubled in the six months between July 2010 and January 2011. The price of corn directly and indirectly affects the costs associated with a number of products. Corn is used to feed livestock; when corn prices increase, so do prices for meat and dairy products that rely on corn for animal feed. Corn is also used in everything from ethanol to sugary drinks. Bad weather has severely damaged crops worldwide, and the nation's corn supply is at its lowest level in nearly four decades, according to the U.S. Department of Agriculture. In addition, ethanol production in the United States eats up about 35 million acres of corn, incentivizing farmers to convert wheat and soy fields to corn, reducing supply for these commodities as well.

Wheat prices have roughly doubled following a devastating drought in Russia last summer that destroyed the major wheat exporter's crops. Wheat prices have also been driven higher as countries, trying to avert food-related protests, have begun buying staples like wheat to stockpile. Costs for wheat, now the world's leading food grain, have tripled since 2008 in some countries, and are expected to rise as worldwide supplies strain to meet demand. The dominant wheat producers - China, India, the United States and Russia - have in recent years suffered extended droughts and periods of bad weather that have reduced crop yields. This year's U.S. winter wheat crop, for example, is being impacted by drought conditions, and the U.S. Department of Agriculture anticipates that the harvest will drop from 60 to 56 million tons. (Look beyond traditional bonds when planning long-term. The alternatives can be extremely rewarding. Check out 5 Inflation-Beating Bond Picks.)

The Bottom Line
Although the average family in the United States spends only 10% of its disposable income on food - compared with 30% for Europeans - rising food prices are felt by nearly any budget. Some manufactures, trying to avoid scaring customers away with price increases, have reduced product sizes instead. Tropicana orange juice, for example, used to come in a 64-ounce carton; the new size is 59 ounces. Kraft American cheese has snuck two slices out of its regular 24-slice package, and Chicken of the Sea Salmon replaced its three-ounce container with a 2.6-ounce substitute. Growing worldwide demand for certain food products, rising production costs, bad weather, and increasing transportation costs result in higher food prices at the wholesale and retail level.

Related Articles
  1. Taxes

    Internet Sales Tax Vs. Brick & Mortar Sales Tax

    Learn about the differences between sales taxes and Internet sales taxes, and the goods and services that typically incur each type of tax.
  2. Entrepreneurship

    How an Internet Sales Tax Will Affect Your Small Business

    Learn about how the Marketplace Fairness Act may impact small business owners should it pass in the House and what the act requires from business owners.
  3. Savings

    Craft Beer Clubs – Bargain or Not?

    If you're an aficionado of artisanal brews (or would like to be), a beer club can be a palate-pleasing, albeit pricey, way to expand your hops horizon.
  4. Home & Auto

    5 Mistakes That Make House Flipping A Flop

    If you're just looking to get rich quick, you could end up in the poorhouse.
  5. Home & Auto

    Rent-To-Own Homes: How The Process Works

    Here's what to watch for when negotiating a contract for a rent-to-own home – and who is a good candidate for this option.
  6. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  7. Stock Analysis

    Has Urban Outfitters Lost its Way? (URBN)

    Urban Outfitters just made a bold move. Will it pay off?
  8. Stock Analysis

    Is Walmart's Rally Sustainable? (WMT)

    Walmart is enjoying a short-term rally. Is it sustainable? Is Amazon still a better bet?
  9. Savings

    Are Wine Clubs Worth It?

    Some points to consider, before committing to a membership for yourself – or as a gift. The right club can also help you save money over the holidays.
  10. Stock Analysis

    Kohl's: Should You Stock Up or Sell? (KSS)

    Many traders are bearish on Kohl's, but long-term investors might want to take a closer look for this simple reason.
  1. Does QVC accept debit cards?

    QVC accepts debit card payments as one of its many payment options. The company, which is the world’s leading video and e-commerce ... Read Full Answer >>
  2. Where can you buy NetSpend reload packs?

    You can only purchase NetSpend reload packs at Giant Eagle, Albertsons, Roundy's and Pathmark supermarkets. NetSpend cards ... Read Full Answer >>
  3. Does QVC charge sales tax?

    QVC, an American TV network, is registered with states to collect sales or use tax on taxable items. QVC is also required ... Read Full Answer >>
  4. Can you pay off a Walmart credit card in store?

    Wal-Mart Stores, Inc. (NYSE: WMT) allows multiple payment options for its credit cards, including in-store payments. The ... Read Full Answer >>
  5. Does Walmart take international credit cards?

    Foreign visitors to Walmart locations in the United States can use their credit cards issued by banks outside of the U.S. ... Read Full Answer >>
  6. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  2. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  3. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  5. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the ...
Trading Center