Ballooning food prices are throwing much of the developing world into disarray, but in rich countries, and particularly in the U.S., consumers have mostly continued to roll through the grocery aisle blissfully immune from the double-digit increases that many credit for sparking riots in the Middle East. In the U.S., the price tag for food at the supermarket inched up only 0.3 per cent in January.
The reason for this, according to a recent CitiGroup report, is—to put it bluntly—that most of what we eat isn’t really food. “For better or worse,” notes the study, “this reflects the very high processing content of food.” In processed foods, in fact, price hikes for basic ingredients can be easily absorbed by slimming production and marketing margins. More evidence of this comes from the calculations of Mark Perry, an economics professor at the University of Michigan-Flint. He has found that finished consumer food products in the U.S. have floated only three per cent above or below the average price for their last 10 years, while raw-food commodities, meanwhile, have swung 14 per cent on average. Cheez Whiz, Pizza Pops and other processed foods may not be healthy, but, it seems, they are at least a helpful ally against food inflation.