Rising Food Prices Squeezing Economy, Too

Amid all the hysteria surrounding the credit crunch, the housing bust, and gas prices, one critical component of the souring economy gets very little attention: food prices.

Food prices rose 23% in 2007, prompting riots from Haiti to Egypt. In the United States, soaring costs have led consumers to cut back on discretionary spending and to buy in bulk from low-cost retailers like Wal-Mart. The exploding prices are attributed in part to ethanol subsidies, which encourage American farmers to grow corn for fuel consumption, reducing the supply of land available for food crops. Sky-high energy prices are also to blame, as well as wealthier Chinese consuming more meat. Business Week explains.

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