January 3, 2012

 

 

Grocery store prices are anticipated to increase 4.25-4.75%, whereas restaurant prices to increase 2-2.5%, according to the Consumer Price Index released by the USDA shortly before Christmas.

 

The USDA's price projections indicate that the inflation of food prices should abate some during 2012. However, the cost of producing food and international demand could contribute to continued increases.

 

Save-A-Lot operator Kirk Lawton said since the store opened in late summer, he has seen an increase in the prices in commodities and even in canned goods.

 

"We are trying to keep the price as low as we can for our consumer," Lawton said. "We buy on the open market like anyone else."

 

Two of the big factors driving up grocery bills are soaring feed prices and global export demand, said Bob Stamey, with Stamey Farms and Mooresville Ice Cream Co.

 

The increased demand for feed grains for ethanol and world demand, he said, has caused a spike in the price in the last 12 months resulting in higher food cost for consumers. The increased prices are good for farmers who grow corn, soy, oats and other grains, Stamey said.

 

"It affects all of our proteins and all of our resources," he said. "Feed grains influence our cost of production. That is the basic feed stuff for livestock. The cost of production is much higher now than it was three years ago."

 

Stamey said it cost more to feed livestock and poultry, which is passed down the line to the consumer. Consequently, the meat aisle has been one of the hardest hit. Beef prices for 2011 are expected to exceed 2010 levels by 9.5-10%. Pork is expected to be up 8-8.5%, according to the USDA. Poultry prices are also up for the year with a 1.2% increase in chicken prices and 10.5% increase for other birds, such as turkey.

 

Scott's Meat Centre owner Scott Andrews said everyone is conscious about what they are spending on meat these days, and he has tried to come up with smaller sizes to accommodate people's budgets.

 

"Pork prices are doing a lot worse than beef is this year," he said. His suppliers attribute the rise to everything from the cost of fuel, natural disasters and the cost to feed an animal. "It's just kind of a trickle-down effect," he said.

 

Even the deer hunters he works with told him they've spent more on corn deer feed this year. Eggs provided the real roller coaster ride this year, he said.

 

Transportation costs are another factor that Andrews and Stamey see affecting the price of goods a t the store. Andrews said in the past, not a lot of people considered how far their food travelled before it got to the store. Half of the cost of operating a truck is fuel, Stamey said, and the cost of transportation affects every price tag in the grocery store.

 

Despite the price increases, Stamey said the average person in the US still spends less per pay check on purchasing food than any other country in the world.