No More Morning Fix? Coffee Prices Reach 13-Year High
Posted on August 25th, 2010
A new report from the Department of Agriculture revealed that coffee prices hit their highest level in 13 years this week, which could break the hearts of many die-hard coffee lovers. Meat lovers may have to share in this sadness, too, since cattle prices have also seen significant increases since the beginning of July. With both prices rising fast, investors and consumers alike are wondering, how expensive can food get?
Coffee and Cattle Prices Jump
According to the Department of Agriculture, coffee futures (the contract price for coffee that will be sold at a later date) jumped to $1.88 a pound this week. This is the highest level in nearly 13 years. In total, prices have climbed 34 percent this year so far.
Cattle futures haven’t had much more luck. Since the beginning of July, they have risen 11 percent and now sit at 99 cents per pound, only a nickel below the record that was set in 2008.
The increase in coffee prices was primarily caused by bad weather in Central America and Columbia that harmed harvests while the increase in cattle prices had a lot to do with a growing demand in beef from Asia and the United States’ inability to keep up with it.
What’s Going On With Food Prices?
Predictions from the Department of Agriculture show that the consumer price index for food (which measures average changes in retail food prices over time) will increase 2 to 3 percent from 2010 to 2011. Additionally, retail food prices will likely rise faster than overall inflation through 2012.
As a result, food expenditures will probably hit about $1,618.7 billion in 2019, which is up from $1.139 billion in 2009.
Consumers are already unhappy about the prices associated with food and have begun either taking more from their bank accounts or scaling back whenever possible. With prices expected to hit even higher notes in the coming months, finding the morning coffee fix or a juicy hamburger for lunch might be among the last items on our “things to do” list.
It’s another compelling reason to ditch the Starbucks and get your coffee at work.
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- How to Manage Food Price Increase in Coming Months
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Tags: Coffee Prices, High
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