Worldwide food price increase affects campus
Campus food has become more expensive to keep up with the worldwide increase in food prices.
It should take at least two good harvests in a row for prices to go down.
Wednesday, April 23rd, 2008
As worldwide demand continues to drive up the price of food, KU Food Services is monitoring market trends and exploring its options to keep campus food prices as low as economically possible.
Nona Golledge, director of KU Food Services, said the national average cost of food increased about 4 percent in 2007, which is up from the historical 2.5 annual increase during the past 10 years.
“This year, the rising cost isn’t isolated to just one food group but the entire wide range of food items have been impacted,” Golledge said.
Golledge said the rising cost of food prompted KU Food Services to raise some of its prices on campus. Golledge said coffee prices increased about 4 to 5 percent because the University’s coffee supplier raised its prices. Anything that contains grain has also become more expensive, she said, and campus salad bar prices have climbed a small percentage.
“We anticipated prices would go up this year so we did raise some prices, but not across the board,” Golledge said. “We’ve only increased prices on items that have become noticeably expensive in order to balance the costs.”
She said she didn’t know yet whether other prices would go up in the future to counter the rising costs. But she said her department wanted to avoid that.
“We’ll keep monitoring trends and try to respond in a responsible way to keep us financially sound while keeping our customers’ best interests at heart,” Golledge said.
Glenn Barnaby, professor of agricultural economics at Kansas State University, said four main economic factors were driving the price of food up: worldwide increase in demand, the sinking value of the dollar, rising fuel costs and the weather. Some of these factors are interrelated.
The sinking value of the dollar, for example, is increasing worldwide demand, he said, because U.S. exports are cheaper for foreign countries to import.
“Even though our economy is having problems, China continues to grow at an annual rate of 8 percent,” Barnaby said. “The low value of the dollar makes grain cheaper overseas. As long as Asian countries continue to grow at the same rate, commodity prices will continue to rise.”
Both the increase in worldwide demand and the decline in the dollar’s value are contributing to the rise in fuel costs, which Barnaby said was making it more expensive to transport food and livestock feed. He said the price of fuel was driving the prices for all goods in the United States.
The weather determines how much farmers are able to supply the growing demand. Barnaby said dry weather in southwest Kansas this year could bring about a poor wheat crop during harvest in late June or early July. Wheat peaked at $13 per bushel about a month and a half ago, but he said a good wheat harvest this summer could easily drop the price about 30 percent.
Barnaby said it would take two good harvests in a row for grain prices to fall considerably.
Barnaby said the rise in food prices wasn’t bad for everyone. Farmers, he said, were profiting from the spike in exports.
“When you’re talking about an increase in prices, it always depends on which side of the desk you sit,” he said. “Farmers probably don’t consider these high prices to be bad, but buyers have the exact opposite perspective, which is true in any economy.”
— Edited by Patrick De Oliveira
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Look at what's happening in Haiti. We're damn lucky when the worst we can complain about is stuff like this.
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