The stock market dropped sharply on the disappointing U.S. economic reports and growing concerns about Japan's nuclear crisis. The Dow Jones industrial average fell by more than 240 points, or 2 percent.
Hints of steeper food prices will likely show up in the government's report on consumer prices, due out Thursday. The consumer price index is forecast to rise 0.4 percent, the same as the previous two months, but the wholesale report caused several economists to warn it could be higher.
Many economists expect food prices to keep rising through the end of the year. Consumer food prices will be about 5 percent higher this fall than the previous time last year, according to RBC Capital Markets. That's up from the current annual pace of about 2 percent.
Food prices are already the highest since the U.N. began keeping track in 1990.
Corn prices have almost doubled since last summer, although they did dip this week after Japan's devastating earthquake and tsunami.
The harsh winter took a toll on restaurants, grocery stores and consumers. Normally if there is a shortage of one product in Florida, such as green peppers, companies can turn to Mexico or Texas. But all the major vegetable producing regions were harmed. That has led to everything from smaller heads of lettuce to higher prices for bananas and scarred fruit.
"This year was basically a perfect storm," says Supervalu's Bates, who hopes things will improve now that the spring growing season is almost here.
Ashley Sewell, who works three part-time jobs in Fort Worth, Texas, says she sees the difference when she goes out to eat or shop for groceries. She's an avid cook who used to wander the grocery-store aisles looking for inspiration. Now, she takes a list.
"I used to cook for my friends and neighbors. I can't do that anymore," she says.
Americans are also being hit by the highest gas prices in more than two years. The national average price Wednesday was $3.55 a gallon, up 42 cents from a month earlier, according to the AAA's Daily Fuel Gauge.
Still, the U.S. is mostly insulated from more devastating impact of higher food prices around the globe. Last month, the World Bank estimated that higher prices for corn, wheat and oil have pushed 44 million people into extreme poverty since last June.
Americans spend a much smaller portion of their budgets on food — about 14 percent — compared with 40 percent to 50 percent in developing countries. Labor makes up a bigger portion of food prices in the U.S., while in developing countries people are more likely to buy items like wheat to make their own bread, making them more susceptible to swings in commodity prices.
Copyright 2011 The Associated Press.