"Nowhere to Hide" from Rising Food Prices

NEW YORK -- Don't look now, but inflation is expected to hit food hard this year.

"Corn is a big one" in the higher prices department, Bloomberg Businessweek Assistant Managing Editor Sheelah Kolhatkar told "Early Show on Saturday Morning" co-anchor Betty Nguyen. "The Agriculture Department released a report a couple of days ago about crop forecasts for the year and predicted corn production is going to go down very significantly, which led to a spike in prices."

Why corn's rise?

"There are a lot of reasons," Kolhatkar replied. "Weather is cited as a big one. There's been sort of freak weather in different parts of the world. Russia experienced a drought. There are floods in Australia. There's been sort of freezing weather in Florida. Our own Midwest experienced flooding earlier this year.

"And because the market for a lot of these food commodities is global, when something strange happens somewhere, that can affect a crop.

Making matters worse, she says, "Corn has sort of a ripple effect, because it goes into a lot of different foods, and it is a big component of feed for animals. So, meat, as a result, is expected to go up quite a bit -- beef and pork were cited. Other grains, wheat, and (many) fruits and vegetables."

The same thing can be said of soy. Its price is thought likely to increase, and it's used in a wide variety of foods.

"There's really nowhere to hide," Kolhatkar observed. "I heard an economist from the U.N. say yesterday there is really nothing good in this story, particularly."

One holdout? "It seems eggs have not gone up as much as other things. I was thinking. 'Eggs for dinner' might be one slogan to tack onto your refrigerator!"

But higher food prices won't stop at your door.

"Restaurants are expected to be sort of passing on some of these costs to their consumers," Kolhatkar said. "The coffee shop down the street from my house had a sign saying they were raising their pastry prices because of wheat prices going up and they were sorry. And the fact is, you're going to have to think twice before buying the muffin, going out to dinner. It might be good opportunity to rediscover cooking at home."

In which case, what can consumers to minimize the impact on them of rising food prices?

"I think," Kolhatkar responded, "the key right now to shop smarter, to buy things and load up on them when they're on sale, to accept that if tomatoes in the middle of winter are eight dollars a pound, you're just gonna use canned tomatoes. And that scary thing -- clipping coupons if you have time to do that that -- always works. And don't go to the supermarket hungry. Bring a list."