AP Markets Writer
NEW YORK (AP) -- Breakfast is now being served with a side of sticker shock.
The price of bacon is surging and the cost of other morning staples, like coffee and orange juice, is set to rise because of global supply problems, from drought in Brazil to disease on U.S. pig farms.
And it's not just the first meal of the day that's being affected. The cost of meats, fish and eggs led the biggest increase in U.S. food prices in nearly 2 ½ years last month, according to government data. An index that tracks those foods rose 1.2 percent in February and has climbed 4 percent over the last 12 months.
While overall inflation remains low, the increases in food prices are forcing shoppers to search out deals and cut back.
Denise Gauthier, 54, a screenwriter in North Hollywood, Calif., calls the rising prices "shocking and outrageous." To cope, she has become more frugal, hunting for discounts and buying less food overall.
"I will look for things that are on sale and adjust my menu for that," says Gauthier, who now stocks up on her favorite coffee when it goes on sale for $4.99.
Even though food companies use a range of cost-cutting methods to limit the effect of higher food costs, consumers will likely feel the "ripple effects" of rising commodity prices, according to the Grocery Manufacturers Association, a trade organization for more than 300 food, beverage and consumer product companies.
Here's a rundown of why breakfast food costs are rising, and why they could keep going up.
Bringing home the bacon is costing more.
The price of lean pork in the futures market is at record levels and is up 52 percent since the start of the year, to $1.31 a pound. Traders are concerned about a deadly virus in the U.S. hog population.
That could further boost bacon prices, which were already rising after farmers cut pig production because of higher feed costs. Those cost climbed after a drought in 2012.
The average price of a pound of sliced bacon in U.S. cities was $5.46 in February, up from $4.83 a year earlier and $3.62 five years ago, government data shows.
The retail price of pork is projected to climb by 2.5 percent to 3 percent this year, according to government forecasts.
"You should expect to see very high prices for your ground beef, your other meat cuts, all the pork cuts will be higher this year," Donnie Smith, CEO of Tyson Foods, said in an interview with CNBC on March 12.
U.S. pig herds have been hit by a virus called porcine epidemic diarrhea, or PED, which causes vomiting and diarrhea in the animals. After the first case in the U.S. was confirmed in May, the virus spread through hog herds during the cold winter. While the disease doesn't affect people and is not a food safety concern, it can lead to mortality rates of between 80 and 100 percent in newborn piglets. That's raising concerns of thinner herds as the U.S. heads toward the summer grilling season, when demand typically picks up.
Traders don't know exactly how badly the virus will impact pork production because it's the first time that PED has been detected in U.S. herds, says Dennis Smith, a commodity broker at Chicago-based Archer Financial Services.
"It's become a hysterical market," Smith says.
Gus Kasimis, 60, manager of the Green Kitchen Restaurant, a New York diner, says that increases in food prices had already become more frequent and that he had been forced to pass on the higher costs to customers.
But he's not worried that people will stop coming. Instead, they will cut down in other areas, perhaps spending less at more expensive restaurants, if they feel the squeeze.
"They still need to get a decent breakfast," he says.
You need your morning brew, and you'll likely pay more for it, at least at the supermarket.
Coffee futures have surged 57 percent this year and this month rose above $2 a pound for the first time in two years. Coffee growing regions of southern Brazil, the world's largest coffee producer, have been hit by drought. Analysts are forecasting that Brazil's crop could shrink by about 20 percent this year.
Shoppers should be prepared to pay more at grocery stores, if the current trend continues for more than a month, says Dan Cox, the president of Coffee Analysts, a company that tests coffee quality for retailers.