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SALT LAKE CITY -- Zions Bank economist Jeff Thredgold admits it's impossible to predict the price of food in the next few years. "It's like asking, ‘Where will oil prices be in two to four years?'"
But he believes we could see an increase in the future. He says it's all tied to the standard of living and it's improving around the world.
"If the global economy continues to grow, and we expect it will, and we see the standard of living in India and China, and many parts of the world rise," said Thredgold, "you're going to see a stronger demand for beef and dairy products. That may suggest prices may move a little bit higher."
At the same time, Thredgold explains that prices for wheat and corn are tied to weather conditions.
"We've had parts of the country this year that have too much water and other parts that don't have enough water," explained Thredgold. "And so we've had an unusual combination of weather that has forced prices higher."
But he also says bumper crops could offset the higher prices in other areas.
Food prices as measured by the Consumer Price Index have risen about 4 percent in the last year, with most of the increase in the last five to six months, according to Thredgold.
He says as these commodities rise, we may see what he calls the substitution effect. "If beef prices are particularly high, then you have an option to look at pork or chicken," he explained. "At times when pork is high, you look at alternatives."
But he also says Americans still have the ability to buy food at a low cost. "In many parts of the world, half of people's incomes go towards food," he said.
Written by Cleon Wall and Nkoyo Iyamba .
