GLOBAL + U.S. FOOD PRICE Inflation

Per the 4/14/08 Larry Kudlow show on CNBC, The World Bank estimates that GLOBAL FOOD PRICES have risen 83% over the past 3 years!

The million dollar question remains unanswered though - How much of this HUGE increase in global food prices is the result of pure inflation (including the effect of the weak U.S. dollar) VERSUS REAL WORLD supply/demand food commodity market dynamics (in which case an increase in prices is mostly reflecting an actual SHORTAGE of global food commodities against the rapidly growing middle class demands/appetites of the BRIC + ROW nations) ?

-------------------------------------------------------------------------

*Check out the interesting Business Week article link below regarding U.S. food inflation:

http://www.msnbc.msn.com/id/24111033/

Some Takeways from the article:
*Americans spend about 15% of their total household income on food + beverages

*In the U.S., grocery bills are surging: Nearly every food staple has seen a double-digit percentage increase over the past year, including a 38% hike for a dozen eggs, to $2.16, and a 19% jump, to $1.78, for a loaf of white bread, according to American Farm Bureau data.

*The surge in food costs has been attributed to several factors, including the increasing number of American farmers who now grow corn to supply the ethanol energy industry INSTEAD of food companies. On a side note, CNBC market commentator Jim Cramer believes the U.S.'s current ethanol energy policy is misguided, fundamentally unsound and economically dangerous...he even jokingly refers to it as the U.S.'s Food For Oil program (naming it after the United Nations' infamous 'Oil for Food' program that has been marred by corruption + scandal).

*Corn prices have soared, hitting $6 a bushel, up 50% from 2007 and triple the price of three years ago. Corn is the main ingredient in livestock and poultry feed, so the prices of milk, chicken, and meat are also higher

Data Courtesy: Larry Kudlow + Business Week.