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The rising cost of food

Sunday, April 20, 2008 | 12:00 p.m. CDT; updated 1:17 p.m. CDT, Tuesday, July 22, 2008

Here’s a typical grocery list: ground beef, bread, eggs, grapes, cheese, milk and flour.

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Today it would cost $18.28.

In February, it cost $17.57.

Last year, you would have spent $15.08.

It has become painfully obvious that grocery prices are on the rise.

The U.S. Department of Agriculture expects the cost of food to rise 3.5 to 4.5 percent in 2008. That may not appear to be much, but the increase is the largest since 1990, and it can add up.

Stefanie Cade, a mother of four boys, said she spends $200 to $250 a week now. Last year, her budget was $150.

“Our boys are bigger, so they’re eating more and that adds to it,” Cade said. “But the prices are definitely going up too.”

She keeps certain foods in her cabinets because members of her family have type 1 diabetes.These “basics” allow her to keep tabs on rising costs. “That’s how I gauge it, by the milk, the cereal and the eggs,” she said. “When milk and gas go up at the same rate, it’s crazy.”

To trim their budget, the Cades don’t eat out as much. “Now we think about it. It’s more cost-effective to budget tight and keep those foods in the house instead of randomly running out,” Cade said. “Prices have increased in fast food, too.”

The Department of Agriculture points to three key reasons for the increase in food prices: increase in economic prices, increase in fuel prices and increase in demand.

Ethanol is driving up demand for corn and causing corn prices to rise, said Harvey James, associate professor and director of graduate studies for the department of agricultural economics at MU.

Since corn and corn-based products are so prevalent in processed foods, higher corn prices translate into higher food costs, he said. Decreased production of other crops are also likely to raise prices. James also attributes the increasing prices to the world’s increasing population and a higher demand for food.

“Food prices are rising because of demand and supply shocks to the system,” he said. “Once those stabilize, we should see food prices stabilize. I am not convinced this will happen soon, but within the next year or two.”

Lowry Henley, who is retired and living on Social Security, is facing the higher prices with traditional frugality.

Henley lives alone and practices the same shopping habits he always has: He looks for coupons and shops sales at different stores.

“You have to eat just like you have to drive, so you look around and look at ads in the paper,” he said.

Tasha Williams has a similar outlook, “I am concerned about prices rising, but I don’t think it’s going to go back down,” she said. “People are paying it and are worried more about gas prices. I think we’re just going to have to adjust.”

Even if there is a sting at the checkout counter, there are other things to think about, Cade said. “My girlfriends and I talk about how much we spend at the grocery store constantly. It seems to always be a focus. You just do your grocery shopping first and work down from there,” she said.

“I’m not quite as worried about food as I am with gas prices. I worry more for those with even lower-income than us because I think over $3 for milk is high. And milk is a necessity. The prices are rising when people’s income isn’t and that’s scary,” she said.

This concern may have some merit. The Central Missouri Food Bank has been affected by the price increases, too. “The increase in food prices is a concern because we buy some food at wholesale,” said Peggy Kirkpatrick, executive director. “It’s not donated, so we have to pay the high prices just like everyone else.”

Along with this, Kirkpatrick must focus on the business aspects of increased prices and increased demand,

“It’s just like any business, when they’re faced with challenges like this, they increase revenue and decrease expenses,” Kirkpatrick said.

She also said that donations have not decreased but there are more people coming in to the food pantries.

“What we’re seeing is a rapid increase in the number of people that need help. More new people who have never been to the pantry before are coming for assistance,” she said.

Some of the shock may be absorbed because people often adapt to changing situations.

“One thing about price increases is that you have to constantly be watching because there isn’t a lot of consistency,” Cade said.“You have to plan a lot more.”

Williams has learned this as well. She knows how to shop and when to shop to get certain items at a cheaper price, “Some days are better to buy certain things. I don’t buy meat on the weekends because it’s higher. I usually end up going to the grocery store three times a week,” she said.

While the number of trips has increased, she said she has cut back on what she buys, “I don’t even buy produce anymore. It is outrageous. It’s too expensive to be healthy.”


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