CONSUMERS START TO FEEL PINCH FROM HIGHER GRAIN PRICES

The surge in grain prices that has been stoking food inflation for months in much of the world is beginning to seep into U.S. supermarkets and restaurants.

U.S. food prices will jump between 3% and 4% this year, the U.S. Agriculture Department forecast Thursday, after rising in 2010 by the slowest rate since 1962.

The cost of processing food is soaring in part because foreign demand for U.S. agricultural commodities is surging at the same time the rising price of gasoline is stimulating the biofuel industry's appetite for corn to make ethanol.

Prices of corn, wheat and soybeans - crops that are ubiquitous in U.S. food products - are up 88%, 76% and 37%, respectively, from 12 months ago. The soaring cost of fattening livestock with grain is also helping to lift prices of hogs and cattle to record-high levels. On top of all that, rising oil prices are lifting costs of packaging and transportation.

The USDA raised its 2011 food-inflation forecast Thursday from the 2% to 3% range it had been projecting since July. The government's consumer-price index for all food rose 0.8% in 2010. A change of one percentage point in the food-inflation rate is equal to about $12 billion in annual spending.

The USDA expects food prices this year to climb at roughly twice the general inflation rate. But U.S. consumers are insulated from the full brunt of the price spirals under way in many emerging and developing economies, where raw commodities represent a bigger share of food costs, and people spend a far bigger proportion of their incomes on food than do U.S. consumers. In India, where tens of thousands of people protested high food prices this week, food prices have been climbing at double-digit rates.

In the U.S., supermarket executives remain leery of hitting consumers with much higher costs for fear they will shop elsewhere.

Source: The Wall Street Journal

ALDI OPENED FIRST STORE IN NYC

The German discounter Aldi opened on February 18 its first store in New York City as the discount retail giant looks to help consumers in the Big Apple "stretch their grocery dollars."

"At Aldi, everything we do is designed with one goal in mind: to help our customers stretch their grocery dollars. We provide great quality products and low prices every single day that our shoppers have come to know and count on," Bruce Persohn, Aldi's South Windsor divisional vice president, said.

U.S.: RECORD FREEZE CAUSES PRODUCE SHORTAGE

The worst winter freeze in 60 years in the southwestern United States and Mexico destroyed more than 4.4 million tons of corn and more than 80% of exportable produce. The vegetable and fruit shortage is causing food prices to surge. “Bell peppers, for example, went from $14.95 a box to $48. Roma tomatoes from $8.95 to about $32,” Nogales International reported.

Source: realtruth.org

U.S.: CONSUMER PRICE INDEX CLIMBS IN JANUARY

The overall Consumer Price Index rose 0.4% in January to 221.1, according to the Bureau of Labor Statistics of the Department of Labor (BLS). With the gain, the index now has increased 1.6% over the past 12 months. The index for food and beverages also finished higher, rising 0.5% to 222.6 in January after rising 0.1% in both December and November.

The food index rose 0.5% in January after climbing 0.1% in December and 0.2% in November, and all six major grocery store food groups posted increases.

The sharpest gain was posted in the index for nonalcoholic beverages, which rose 1.5% to 162.6. The gain reflected sharp advances in the indexes for carbonated drinks and coffee, the BLS said.

Fruits and vegetables also moved up sharply, increasing 1.3% to 278.5. The index had advanced 1.8% in December, and the most recent gain in part reflected a 2.1% increase in the index for fresh vegetables.

The index for meats, poultry, fish and eggs rose 0.9% to 213.9, while the index for cereals and bakery products rose 0.8% to 253.9.

The indexes for dairy and related products and for other food at home posted slight increases, with the former up 0.1% in January and the latter up 0.2%.

The index for food away from home rose 0.2% in January and has risen 1.5% over the past 12 months.

FRESH & EASY HAS MOST STORES CURRENTLY GREENCHILL CERTIFIED IN THE COUNTRY

Fresh & Easy Neighborhood Market has added four more GreenChill certified stores this year. GreenChill certification is awarded by the U.S. Environmental Protection Agency’s (EPA) GreenChill Partnership for stores meeting tough benchmarks for cutting emissions that harm the earth’s protective ozone layer and contribute to global warming.

Fresh & Easy opened its first GreenChill certified store in September 2010, and now has a total of eight stores currently certified through the program, the most of any grocer in the country. Only 45 of the nation’s more than 35,000 grocery stores have received GreenChill Store Certification awards.

REPUBLICAN BUDGET PROPOSAL TO CUT FOOD ASSISTANCE

The House Republican leadership proposed significant cuts in U.S. domestic and international food assistance programs in its effort to reduce federal government spending by $100 billion during the current fiscal year.

The Republican leadership proposed reducing funding for the Special Supplemental Nutrition Program for Women, Infants and Children by $747 million, or nearly 10%, from an enacted budget of $7,252 million in fiscal 2010.

Funding for child nutrition programs would be reduced $6 million from fiscal 2010 by eliminating funding for a school community garden pilot program ($1 million) and funding for competitive grants for implementing various child nutrition initiatives ($5 million).

The U.S. Department of Agriculture’s commodity assistance program budget would be reduced $6 million from fiscal 2010 levels to $242 million by eliminating funding for emergency food program infrastructure grants.

The budget for domestic nutrition program operating expenses would be slashed $3 million from fiscal 2010 to $145 million.

Proposed cuts were more severe for international food assistance programs. The Republican leadership proposed to reduce funding for emergency food assistance under P.L.480 Title II, Food for Peace, to $1,003 million, down $687 million, or 41%, from $1,690 million in fiscal 2010.

Funding for the McGovern-Dole International Food for Education and Child Nutrition Program would be more than halved under the proposal, to $100 million from $210 million in fiscal 2010.

Source: FoodBusinessNews.net