Food Prices Higher in 2011 & GIPSA Rule Impact plus Food Forethought. I'm Greg Martin with today's Northwest Report.
Food prices could be higher in next year, the result of rising ingredient and commodity costs. Some analysts say prices could go up an average 4 percent in 2011. Prices have been fairly stable for the last year and a half. Most analysts aren't expecting a return to the 5.5 percent food inflation rate of 2008. But some say the increases could be a sharp departure from the 1.8 percent rate of 2009 and the even tamer increase expected for all of 2010. Commodity costs have been building, particularly over the summer. But until recently, food makers have been reluctant to pass down those expenses.
Ron Murphy of Informa Economics Inc., which did a study for the meat industry on the proposed GIPSA Rule impact, discusses what that particular study says might happen if the rule goes into effect.
MURPHY: The first thing we think is very likely to happen is that you are going to see a reduction in the number and variety of marketing agreements or AMA's as they're often referred to. The reason for this is directly related to the provision in the rule that removes the need to show competitive injury. We think that in order to limit legal liability and legal exposure that it's very likely that the packer's response will be to reduce the number and variety of these marketing agreements.
Now with today's Food Forethought, here's Lacy Gray.
It seems just yesterday that the House and Senate were haggling over the 2008 farm bill, which authorizes most federal farm and food policies. But here we are again with only a little over a month left in 2010 and according to a Congressional Research Service report there are thirty-seven programs set to expire before the next passage of the farm bill in 2012. Included in these endangered programs are the Grassland and Wetlands Reserve Programs, the Farmers Market Promotion Program, and the Beginning Farmer and Rancher Development Program. These and other programs that focus on sustainable agriculture and land conservation are going to have to scrounge for funds from other sections of the farm bill. This practically ensures an intense competition between supporters of conservation programs and smaller farming operations. All the endangered programs are equally important and influential in the developing of sustainable agriculture and preserving natural habitat. It's definitely adding up to another long and arduous struggle for Congress in creating a farm bill that doesn't leave these programs without support.
Thanks Lacy. That's today's Northwest Report. I'm Greg Martin on the Ag Information Network.