Javier Blas, co-author of “UN poised to ration food aid as prices soar,” the item featured in the previous post, has a companion analysis in the same, Feb 25, edition of the Financial Times: “Shoppers warned bigger bills on the way.” Highlights:

• At USDA’s annual agricultural outlook forum, William Lapp of Advanced Economic Solutions told delegates during a luncheon: “I hope you enjoy your meal. It is the cheapest one you are going to have at this forum for a while.”
• Larry Pope, CEO of Smithfield Foods, the largest U.S. pork processor, warned delegates of a wave of “real food inflation” just at the time central banks were under pressure to cut interest rates. “We’re seeing cost increases we’ve never seen in our business.”
• One of the conference’s main concerns, reports Blas, is that rising food prices “have reached a stage at which the impact will be felt not only on fresh food but also filter through the supply chain and raise the cost of processed food.”
• Tom Knutzen, CEO on Danisco, said in an interview in Brussels that rising vegetable oil costs have made it more expensive to produce preservatives, flavorings, and colorings.
• Last year, food inflation rose 4%, the highest annual rate since 1990. USDA forecasts food prices wil rise this year at 3-4%.
• Joseph Glauber, USDA chief economist, said until now some food processing companies had absorbed the higher commodity prices, but that trend was about to change. Wheat prices had previously moved from $3 to $5 a bushel without significant consumer impact, “But now the wheat price has jumped to nearly $20 a bushel. These large increases will show up [in consumer prices].”
• Some “relief” (ahem) may be in sight if a global “slowdown” in the world economy pushes commodity prices down, speculated Simon Johsnon, chief economist for the International Monetary Fund.
• But Lapp believes would prices will still rise, because large inventories and financial hedges–mitigating factors in recent years–would vanish.