If It's Breakfast Time, Fork Over the Dough

March 30, 2008 — -- On top of the financial pressure from rising gas prices, Americans are also feeling the pinch at the breakfast table.

A simple trip to the supermarket for breakfast staples can be downright daunting.

"I don't even want to go," says Manhattan mother Linda Miller.

She says food for her family costs nearly double what it did a year ago — even though she buys the exact same amount.

"I'm stressed about how much money I have in my pocket and whether I have enough for food," Miller says.

Some of the hardest-hit foods are breakfast staples -- including milk, which costs about 20 percent more than it did a year ago; eggs, up 19 percent; coffee, 16 percent; and bread, 11 percent. The cost of wheat to make bread is at an all time high.

"It's definitely a serious problem," says Michael Santoli, senior editor for Barron's, the Dow Jones business and financial weekly. "It's coming at a time when the job market is softening up and the overall economic outlook isn't so great."

The cost of food is rising at the fastest rate in nearly two decades, caught in a perfect storm of inflationary pressures.

"Crop prices are at record levels," Santoli says. "Wheat, soybean, that is what's used to feed cattle, hogs — obviously, it pushes higher prices through the entire system."

Wheat prices are at an all-time high because many farmers have stopped planting it, so they can grow more corn. Corn prices are soaring because it's used to make ethanol, an alternative for expensive oil.

Those record oil prices mean it's more expensive to transport food to market. And finally, food prices are driven up by increased demand from the growing middle class in places like India, China, and Latin America.

Manhattan shopper Karen Fitzgerald says the cost of the cereal she likes has gone up $2 since the last time she went to the supermarket.

"It just really concerns me," she says, "because where does it end?"

Until it does end, companies are becoming creative, trying to make their food packages smaller so they don't have to raise the price.