Rise in US agriculture market prices leading to higher food costs
Grains, meat demand increasing as supply decreases
Demands for U.S. agriculture and meat products are projected to be near their highest in 2011, coming at a time when production is down and prices are rising each month and hitting record highs.
The latest storm in the U.S. contributed to price increases, with corn rising almost 2.5% in Chicago and lean hogs edging higher as investors reweighed the impact of the snowstorm that halted grains and livestock movement in the Midwest. Corn futures for March finished up $0.16, or 2.4%, at above $6.78 per bushel on the Chicago Board of Trade. For the week, the market was up more than 5%.
A Reuters poll on Friday showed U.S. cattle and hog futures were expected to hit record highs in 2011, setting the stage for less meat on the dining table. "That should push up prices," said Ron Plain, an agricultural economist at the University of Missouri. Profits made by Tyson Foods in the last quarter by selling pork and beef at higher prices also showed food makers might pass rising costs to consumers.
Wheat for March fell 0.6% to $8.53 per bushel, but was up 3.3% on the week. Soybeans finished almost flat on the day and up 2.6% on the week.