Rice and Wrong: Food Costs Flummox

Food prices are igniting riots in developing countries -- and quietly claiming a chunk of my family's bottom line.

Record rice and wheat prices were clearly reflected in my family's recent $350 grocery bill for mostly grain-based and dairy products. The continuing global agricultural crisis has obviously ensnared my local community and probably many others.

I rarely break $300 at the grocery store -- even for a large order. But this outrageous tab -- to ensure proper nutrition for my five-person family -- is an alarming indicator that the price of yet another significant nondiscretionary expense (in addition to fuel) is going haywire.

Free Rice, Don't Panic

In another alarming sign, Wal-Mart WMT has announced that its Sam's Club warehouse stores are now limiting sales of Jasmine, Basmati and long-grain rice to four 20-pound bags per customer, due to supply and demand issues. Costco COST also reported an increased demand for staples such as rice and flour, as customers stock up due to worries about prices and possible shortages.

I'm deeply troubled that concerns about food hoarding now exist in a country that's supposedly famous for its "amber waves of grain."

Can bread lines -- or an equivalent crisis -- be looming in our nation's future?

Food prices are rising due to a confluence of world events. The growing economies in India and China mean that more residents can now afford better-quality food, so global demand for meats and grains is rising.

Additionally, a greater share of the U.S. corn crop is being diverted to producing biofuels, such as ethanol. The European Union also has set targets for biofuel production, which it now may reconsider in the wake of worldwide riots that coincided with the prices of rice, corn and wheat doubling during the past year.

To compound matters, rising fuel prices are increasing the costs of transporting food around the globe -- and we all pay the consequences at the grocery store. Civil unrest, poverty and weather conditions also play significant roles in food prices.