Alert shoppers are accustomed to watching food prices go up and down. But a string of forces -- from droughts to diseases -- is raising the cost of a trip to the grocery store at a rapid clip.
And it looks like it will be a while before the price pressure eases.
Some of that pressure is coming from California -- the source of roughly half the nation's fruits and vegetables -- where a long-running drought is forcing farmers and ranchers to cut production. After the driest year on record, large sections of farmland are expected to lay fallow this year as the Golden State copes with an ongoing water crisis
That could have "large and lasting effects on fruit, vegetable, dairy and egg prices," according to a recent USDA report, which said the full impact has yet to be felt.
Smaller cattle herds have forced meat prices higher in March -- up more than 5 percent from a year ago, as demand remained strong despite tightener supplies. Ranchers are getting higher prices for cattle and food companies are able to pass them along. TSN) CEO Donnie Smith told CNBC last month. "You should expect to see very high prices for your ground beef, your other meat cuts, all the pork cuts will be higher this year."
Food prices are notoriously volatile, subject to short term spikes and drops based on weather-related shortages and surpluses. But the forces at work this year are longer-lasting.
An ongoing contraction in the U.S. dairy herd, for example, is pushing up retail prices of cheese, ice cream, and other processed dairy foods.
Farm egg prices have been among the most volatile, jumping by 20 percent in February after dropping by 28 percent in January.
U.S. farmers aren't the only ones facing a production squeeze. A drought in coffee growing regions of southern Brazil, the world's largest coffee producer, has pushed up the cost of a cup of Java worldwide. Coffee futures have surged 57 percent this year and rose above $2 a pound last month for the first time in two years.
Consumers are also coping with higher costs beyond their supermarket shopping cart. After a brutal winter in much of the country kept shoppers home, a pickup in demand has sent clothing and used car prices higher in March.
Rents are also going up in most of the country, up 2.7 percent in the latest 12-months, a pace not seen since the housing market collapsed in 2007. Medical costs are also rising.
Because food prices are typically more volatile than other consumer costs, economists and policy makers at the Federal Reserve usually ignore them when looking at the so-called "core rate" of inflation. But after a long period of inflation running less than 2 percent a year, the latest surge in prices bears closer watching, according to Capital Insight senior economist Paul Dales.
"We suspect that core inflation will rise to 2 percent this year and beyond it next year, which would catch the Fed off guard," he wrote in a recent note to clients.
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