Consumers in Britain may have to spend almost ₤1,000 (us$2,110) more on food this year than they did last year. The prices of both bread and milk have reached all-time highs.

According to Associated British Foods, the prices of four of the most important food commodities—wheat, corn oil, malting barley and dairy products—have doubled in the past year. In dollar terms, food prices are up by more than 30 percent, according to the Economist commodity-price index. Leading supermarket chains are charging their customers an average of 12 percent more for a basket of 25 staple goods compared to last year.

What is the cause of these rising prices? One cause is that the price tag on many raw ingredients has increased over the past year. Bad harvests and growing global demand for commodities such as wheat have pushed prices up. The worrying thing is that many long-term problems are pushing up the costs of these foodstuffs; these problems seem unlikely to go away. For more information on the long-term problems being experienced in agriculture, see our articles “Wheat Prices Soar Globally” and “The Food Shortage Reality.”

The rising price of oil also has a significant impact on food prices. In some ways, this impact is even greater than that of the rising cost of food commodities. According to the Telegraph, “Many basic foods are more influenced by the cost of oil than the actual ingredients. Wheat, for instance, makes up only about 7 pence of the cost of a loaf. This is completely outweighed by its baking, packaging and distribution costs, all of which are determined by the price of fuel” (November 14).

This increase in food prices will put a squeeze on the pocketbooks of British consumers, who are already having to deal with rising oil prices and council taxes along with the highest mortgage rate since March 2001. The prime minister, Gordon Brown, has launched a wide-ranging investigation into the security of Britain’s food supply.

Great Britain is of course not the only nation that has been affected. Rising food prices have been felt globally. This agflation—the rising cost of foodstuffs—comes at a bad time for the world economy. It means that many central banks have fewer options for dealing with a slowing economy and declining consumer spending. The typical central bank response of slashing interest rates and supplying more money would make food costs rise even further. Additionally, growing demand for food in developing nations indicates that even discounting inflation, food will probably continue to become more expensive. This rise in prices will be felt by consumers the world over. The Trumpet warns: Prepare now to reduce your standard of living—increased food prices will continue to get worse.