Prices Surge in the U.S.

For years, cosmetic companies and their suppliers complained that pushing through price increases was nearly impossible. During the past year, however, more suppliers are boosting the price of their raw materials as energy costs soar. And the industry is is not alone. According to recent figures from the Bureau of Labor Statistics, U.S. food prices increased by a whopping 4.9%, that’s .8% higher than 2007 inflation rates and 2.8% higher than food prices increased in 2006, according to ACNielsen.

In the U.S., staples like milk, cheese and bread experienced especially marked hikes, with poultry, fruits and vegetables, cereal and meats following close behind. Internationally, increases in the prices of dairy and grains pushed the food price index used by the Food and Agriculture Organization of the United Nations up by almost 40% over the last year. By comparison, in the previous year period, the food price index was up only 9%.

With global commodity stocks at historic lows, a growing demand for food, feed and fuel, tight supply, and no plan for increased agricultural productivity, this higher price phenomenon is likely to continue. The International Food Policy Research Institute estimates that global cereal prices will rise 10 to 20% by the year 2015.