Food 3% Higher in 2008?!

I noticed this article on the Seattle Times website this morning. I can't help but notice that our family grocery purchases have definitely been hitting the pocketbook deeper in 2007. Business & Technology | '08 forecasts: food at least 3% higher; gas up 10.7% | Seattle Times Newspaper: "The sharp rise in food prices seen in 2007 is expected to be followed by another higher-than-normal jump next year, the U.S. Department of Agriculture (USDA) said last week. And 2008's punch will be to the breadbasket." Looks like the trend will continue in 2008 which is somewhat unnerving. To top it off it looks like the trend will be close to the magic 3% number traditionally given to employees as a cost of living increase. What this means to me is the increase in basic costs of goods including groceries and fuel will most likely nullify any cost of living increase in 2008 holding everything pretty much even. Let's just hope we don't see a larger increase. In another note, some of the 3% increase in food was directly attributed to increase in transportation costs most directly related to fuel. I wonder if we will finally see a return to locally grown food options as a more viable alternative to mass produced globally transported food. Local farmer's markets will probably see an increase in use if costs of especially international organic foods increases rapidly. As I monitor my 2008 spending, food will continue to be an area to watch closely.