Comodity inflation

The Labor Department on Wednesday said the producer price index jumped 1.6% last month, following increases of 0.8% in January and 0.9% in December. Producer prices have risen an unadjusted 5.6% over the past 12 months.

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The central bank on Tuesday opted not to make any changes from its interest rate policy and said any inflation rise caused by surging commodity prices would be ?transitory.?

The wholesale price of food saw the biggest increase last month. The food index surged 3.9%, the largest gain since November 1974. Most of the increase stemmed from higher cost of fresh and dry vegetables.

Wholesale food prices are up 7.3% over the past 12 months. The price of many agricultural staples such as wheat, corn and sugar have surged in the past year or two amid global crop failures and rising demand.

Higher gas prices drove up the wholesale energy index by 3.3% in February, marking the fifth consecutive rise. Energy prices at the producer level have surged 15% in the past year, fueled in part by political unrest in the Mideast.

U.S. wholesale prices up 1.6% in February Economic Report - MarketWatch

I hope Bernanke is right, because if he's not, were on the brink of the next major crisis.

Food prices soared 3.9 percent last month, the biggest gain since November 1974. Harsh winter freezes in Florida, Texas and other southern states sent fresh vegetable prices soaring, representing 70 percent of the increase. Tomatoes, green peppers and lettuce all more than doubled in price.

Meat and dairy costs also rose, reflecting higher prices for corn and soybean that are used in animal feed. Economists expect food prices to keep increasing for the rest of this year. Earlier this month, the UN's Food and Agriculture Organization said world food prices have risen to their highest point since 1990, when the agency first began tracking them.