RUMBLINGS FROM A world increasingly hungry for oil and grain caused a 5.3% jump in food prices during 2007 — the largest increase in almost two decades. This year, prices are expected to grow by at least that much.

Among the commodities putting the biggest pinch on consumer's grocery budgets is wheat, which hit a record high of $24 this week on the Minneapolis Grain Exchange, a 480% increase from this time last year. Soybean prices are 77% higher over that same time period; corn is up 23%.

"There is a global increase in demand for food commodities, driven by a rapidly growing middle class in India, China and other developing countries seeking protein," explains Jack W. Plunkett, CEO of Plunkett Research. "Growth in demand is outstripping growth in supply." Hardship has further contributed to the scarcity of certain foods. A drought last year in Australia reduced the availability of milk, while poor wheat harvests in several countries hurt world-wide supply. And beef prices have jumped since the U.S. enacted its largest ever beef recall — 143 million pounds — earlier this month.

Skyrocketing oil prices, which regularly top $100 a barrel these days, have also added to the expense of producing, packaging and transporting foods. "Think of it as paying more per calorie burned," says Plunkett.

The resulting higher costs are swiftly passed down the production food chain to grocery store shelves. "It's like when the price of oil goes up, and you see a difference at the pump in the next day or two," says Al Ferrara, national director for consulting firm BDO Seidman's retail and consumer product division. Constantly produced fresh items like milk (up 19% in 2007), eggs (up 33%) and bread (up 11%) are more apt to reflect changes on a nearly daily basis.