Inflation Watch: Food Prices

Reuters says time to start stocking up on nonperishable food:

U.S. grain prices should stay unrelentingly high this year, according to a Reuters poll, the latest sign that the era of cheap food has come to an end.

U.S. corn, soybeans and wheat prices -- which surged by as much has 50 percent last year and hit their highest levels since mid-2008 -- will dip by at most 5 percent by the end of 2011, according to the poll of 16 analysts.

Some specifics:

The average forecast of 16 grain analysts showed that Chicago Board of Trade corn futures will end this year at $5.96 per bushel, down eight percent from Thursday's close of $6.50-3/4 and down five percent from the end of 2010.

Corn futures posted the best gains among grains and oilseeds last year, surging 52 percent as U.S. stockpiles fell to the lowest in 15 years in the wake of strong demand from the ethanol industry and steady exports after the Russian drought.

Wheat futures were forecast at an average $7.93 per bushel, down 6 percent from Thursday's close of $8.46-1/4 and virtually unchanged from the end of 2010. Wheat futures surged 47 percent last year amid the crop damage.

Soybean futures were forecast at an average of $13.20 per bushel, down 6 percent from Thursday's close and down 5 percent from the 2010 close. Soybean futures rose 34 percent last year for the second straight year of increases.

Prices for corn and soybeans topped out at 2-1/2 year highs last week, while wheat hit a 29-month high on Thursday.

Ron Bailey wrote back in July 2008 on government complicity in high food prices.