NEW YORK (AP) - Breakfast is now being served with a side of sticker shock.
The price of bacon is surging and the cost of other morning staples, like coffee and orange juice, is set to rise because of global supply problems, from drought in Brazil to disease on U.S. pig farms.
And it’s not just the first meal of the day that’s being affected. The cost of meats, fish and eggs led the biggest increase in U.S. food prices in nearly 2 ½ years last month, according to government data. An index that tracks those foods rose 1.2 percent in February and has climbed 4 percent over the last 12 months.
While overall inflation remains low, the increases in food prices are forcing shoppers to search out deals and cut back.
Denise Gauthier, 54, a screenwriter in North Hollywood, Calif., calls the rising prices “shocking and outrageous.” To cope, she has become more frugal, hunting for discounts and buying less food overall.
“I will look for things that are on sale and adjust my menu for that,” says Gauthier, who now stocks up on her favorite coffee when it goes on sale for $4.99.
Even though food companies use a range of cost-cutting methods to limit the effect of higher food costs, consumers will likely feel the “ripple effects” of rising commodity prices, according to the Grocery Manufacturers Association, a trade organization for more than 300 food, beverage and consumer product companies.
Here’s a rundown of why breakfast food costs are rising, and why they could keep going up.
Bringing home the bacon is costing more.
The price of lean pork in the futures market is at record levels and is up 52 percent since the start of the year, to $1.31 a pound. Traders are concerned about a deadly virus in the U.S. hog population.
That could further boost bacon prices, which were already rising after farmers cut pig production because of higher feed costs. Those cost climbed after a drought in 2012.
The average price of a pound of sliced bacon in U.S. cities was $5.46 in February, up from $4.83 a year earlier and $3.62 five years ago, government data shows.
The retail price of pork is projected to climb by 2.5 percent to 3 percent this year, according to government forecasts.
“You should expect to see very high prices for your ground beef, your other meat cuts, all the pork cuts will be higher this year,” Donnie Smith, CEO of Tyson Foods, said in an interview with CNBC on March 12.