Prices for key foods are rising sharply

McClatchy Online ^ | 14 August 2007 | Kevin G. Hall

[shrinkermd]

MIDLAND, Va. — The Labor Department's most recent inflation data showed that U.S. food prices rose by 4.2 percent for the 12 months ending in July, but a deeper look at the numbers reveals that the price of milk, eggs and other essentials in the American diet are actually rising by double digits.

Already stung by a two-year rise in gasoline prices, American consumers now face sharply higher prices for foods they can't do without. This little-known fact may go a long way to explaining why, despite healthy job statistics, Americans remain glum about the economy.

Meeting with economic writers last week, President Bush dismissed several polls that show Americans are down on the economy. He expressed surprise that inflation is one of the stated concerns.

"They cite inflation?" Bush asked, adding that, "I happen to believe the war has clouded a lot of people's sense of optimism."

But the inflation numbers reveal the extent to which lower- and middle-income Americans are being pinched.

The Bureau of Labor Statistics said in its July inflation report that egg prices are 33.7 percent higher than they were in July 2006. Over the same period, according to the department's consumer price index, whole milk was up 21.1 percent; fresh chicken 8.4 percent; navel oranges 13.6 percent; apples 8.7 percent. Dried beans were up 11.5 percent, and white bread just missed double-digit growth, rising by 8.8 percent.

[shrinkermd]

Not good news.

[ken21]

using corn for ethanol

is not

a good idea.

[raybbr]

Orange juice at $8 /gal. Unbelievable!

[microgood]

A lot of this is due to fuel prices.

[Eagles6]

Buy the store brand, it’s $3.25.

[oyez]

There are better

uses for ethanol

than as fuel.

[Extremely Extreme Extremist]

Buy the NOT from concentrate orange juice.

[Moonman62]

Yep, it’s a boondoggle.

[raybbr]

Buy the store brand, it’s $3.25.

Not where I am. The store brand is $6.50 a gallon. This all happened in the last week. Last week I bought it at $4/gal.

[TheSpottedOwl]

Almost 4 bucks for a 10 lb sack of potatoes. We get fresh eggs from friends. I quit buying orange juice, even the frozen concentrate is pretty expensive. Don’t even mention fresh fruit.

[Glenn]

using corn for ethanol

I was surprised that there was no corn on any menu in Ocean City, MD, last week. It used to be a staple food to go with seafood at all the good restaurants. Green beans were served in their place, and I hate crunchy green beans.

[rabscuttle385]

These numbers get lost in the broader inflation rate for all goods and services, which measured 2.7 for the same 12-month period. Across the economy, rising food prices were offset by falling prices for things bought at the mall: computers, cameras, clothing and shoes.

The inflation of necessities, including food, energy, and housing, is much higher than the official overall inflation rate of 2.7 percent. And people can't eat computer hard drives and camera straps.

Figures don't lie, but liars figure. In this case, the U.S. government has a vested interest in keeping COLA wage and benefits increases, which are linked to official inflation rates, low, irrespective of whether the prices of necessary goods are increasing at a faster rate.

[Diana in Wisconsin]

Oh, for Pete’s Sake!

Can’t you see the ‘Rats are gearing up for 2008? Of COURSE the economy is going to go into the toilet. How ELSE will the LibTards win? ;)

Do you, ShrinkerMD, actually DO the food shopping and meal preparation for your household? I’ve fed a family of SIX, which was TWO Adult Males, ONE Adult Female and THREE Teenaged boys for $150 a MONTH all through The Clinton Years.

Oh, yeah. Right. I forgot. Those were ‘The Best Years Ever Ever Since Time Began.’ *ROLLEYES*

ROFLMAO!

[Eagles6]

I buy the ‘from concentrate’ cause it’s the same thing only cheaper.

[Alouette]

Not good news.

Good news, I don't have to buy tomatoes.

[rb22982]

I work for a growing upscale grocery chain (annual sales will top 800 million this year from 600m last year). We measure food inflation at around 4.5% although some of the items have obviously gone up much more than that. Eggs are up considerably from last year but they were down last year from the year before. Our chicken prices are flat but we've noticed some of our competitors prices have gone up. Milk has seen the largest increase. One of the reasons for the larger increase in milk is it already has one of the lowest profit margins of any item in the grocery store (only about 12% vs 45% on most non-sale items) and of course it is extremely perishable. Any cost increase must be passed on almost immediately unlike some other items.

The other big cost factor increase actually started 2-3 years ago was the increased cost of delivery. It's actually leveled out for us retailers this year, but some of the price increases may have been caused by the fuel rise from last year and the year before. Since gas prices have actually dropped this year, we're not expecting any significant delivery cost increases this year or next.

[DB]

I think the better explanation is the devaluing of the dollar. It has lost substantial value over the last five years or so and prices are simply catching up with the loss in value. At least that’s my opinion after building a house for the last three years...

[Mamzelle]

Excuse me--are all egg, milk products being included? That would skew inflation figures all past reason.

Do you realize that the New Thing in a lot of produce and food products is Organic? Free-range. No antibiotics. No hormones. Boutique food.

Upscale people. Whole Foods. Fresh Market. Texas tea.

If all eggs are being included in the price of eggs, that'll also include that package of $3.50 free range eggs as well as the regular $1.50 box that most people buy--and much of this is a fairly recent development. There's a lot more variety in the average supermarket these days.

[Eagles6]

Where the heck do you live, Alaska?