One way or another, it's clear the food price bubble has reached crisis levels. But why hasn't it reached America? For one, Americans and residents of other industrialized nations consume higher proportions of processed foods—Doritos, hot dogs, and the like. A large part of the price of these foods comes from labor, packaging, and marketing, making them less sensitive to changes in food costs. They're less food than food-based products. Economist Mark Perry produced a chart that helps demonstrate the phenomenon. Food prices for raw goods (like wheat) fluctuate wildly, while prices for processed goods (like breakfast cereal) are far less volatile.The graph referred to in the paragraph is embedded above, and comes from this Carpe Diem article.
19 February 2011
Why Americans haven't noticed rising food prices. Yet.
Slate article notes that another factor is insulating the U.S. from the effects now being noted (and protested) in the third world: