Although the recent surge in agricultural commodity prices has caused some concern about a potential increase in food costs, an overall increase likely will be “modest,” according to economists with the Texas AgriLife Extension Service.
“Commodity prices reached record or near-record highs in 2008, but weakened in 2009 and most of 2010,” said Jose G. Pena, AgriLife Extension economist-management at the Texas AgriLife Research and Extension Center in Uvalde. “Food prices increased in 2008 just as the U.S. was entering into what many economists describe as the worst recession since the Great Depression.”
Pena and other AgriLife Extension economists recently assessed the effect rising farm commodity prices might have on retail food prices and whether those increases would result in increases similar to those experienced in and beyond 2008.
“Farm commodity prices fell sharply in 2009 and 2010 after reaching record levels in 2008,” Pena said. “However, food prices continued to rise in 2009 and 2010 even as farm commodity prices returned to 2007 levels.”