U.S. food prices could go even higher unless the Agriculture Department stops subsidizing wheat sales to foreign countries, three consumer groups say.
Representatives of the Consumers Union, Community Nutrition Institute and the Consumer Federation of America, in a letter released this week, urged the USDA to suspend its Export Enhancement Program.The three groups said continuing wheat export subsidies under the program may further jeopardize the supply of this essential food grain and push food prices even higher.
Drought has reduced U.S. crop production sharply this year, including wheat, and has eaten deeply into reserve stockpiles.
Although grain prices have risen sharply as supplies have fallen, Agriculture Department officials have said repeatedly that there are ample stocks to meet domestic and foreign demands until new harvests are ready next year.
But the consumer groups said that if wheat export subsidies continue at their recent pace, it could result in a rise in food prices greater than now expected in 1989 because of this year's drought.