Chicago Trib: Food takes bigger bite from wallet

[El Pinko]

http://www.chicagotribune.com/business/chi-thu_foodfeb21,0,768101.story

Food takes bigger bite from wallet
Rising commodity prices passed on to consumers

By Mike Hughlett and Mary Ellen Podmolik, Chicago Tribune Hughlett reported from Florida; Podmolik reported from Chicago. The Associated Press contributed to this report.

BOCA RATON, Fla. - Sara Lee Corp., stung by record-high wheat prices, plans to raise prices on its namesake bread this spring, the fourth such increase in just 11/2 years. The problem for the Downers Grove-based company and America's other food purveyors is consumers may be close to done eating higher prices fed them by manufacturers and retailers.

While Sara Lee hasn't seen it, already there is evidence that people are adjusting their shopping habits, in some cases trading down after years of splurging on everything from premium coffee to organic pasta. Last month, Jeff Noddle, chairman and CEO of Jewel Food Stores parent Supervalu, lowered his company's guidance for 2008, reportedly saying it was already seeing customers buying cheaper brands to save money.

But take Sara Lee's actions and multiply it by hundreds of manufacturers and thousands of food products, and it's clear why food prices are rising at a pace not seen in almost 20 years.

The trend was underscored Wednesday, when a government report showed food prices played a key role in driving up overall inflation. It's also a huge topic here, where foodmakers such as Sara Lee are gathered for an annual industry conference.





I dunno about you, but I was clipping coupons and buying store brands during the "boom". I don't think I can scrimp any more than I have been...

[Lasher]

1. How fortunate the government stopped using food and energy costs in inflation calculations.

It was 2001 that they made that change.

[SpiralHawk]

2. "Don't worry. I'm in charge. I'm the decider. Smirk." - Commander AWOL

"I can absolutely guaran-demn-tee that me and my republicon homelander cronies will do a heckuva job addressing this fundamental problem. Smirk If you little people get hungry, you can simply withdraw a couple of hundred thousand from your Swiss Bank Account, the way we republicon fatcat cronies do, and eat CAKE. Smirk."

- Commander AWOL

[marmar]

3. No mierda!

I'm a single guy and visit the grocery store fairly infrequently, so I tend not to notice price changes, but in recent trips - DAYUM! The English muffins I buy are nearly double what they were a couple of months ago. The nonfat coffee creamer, soy milk, fruit, cheese - ALL signficantly higher than just a short time before.

:scared:

[TechBear_Seattle]

4. Dare I say "perfect storm"?

The prices for wheat, corn and soy are skyrocketing because of several years of poor weather. Corn is jacked up even higher because of diversion into making fuel alcohol. Most packaged foods rely heavily on wheat, corn and soy, so as the prices for these go up so too do the prices of packaged foods. Higher grain prices increase the cost of meat, especially quality meat from grain fed animals and free-range animals. Then consider that the out of control price of oil has more than doubled the average cost of distributing food from where it was eight years ago.

Meanwhile, median income levels have not kept up with rising food prices, forcing more and more Americans to make due with smaller quantities of food that are poorer quality and have less nutritional value. Making matters worse are the large number of people who are directly affected by the mortgage meltdown and indirectly affected by the credit crunch, shrinking American workforce due to job exports and decreasing pool of good paying jobs.

I am well off, but when I go in to the grocery store and see lettuce at $2 a head, apples for $3 a pound (about $1.35 EACH!!), bread at $3 a loaf... it gets depressing.

[eilen]

5. Time to plan that garden

and buy flour, cornmeal, beans, sugar and coffee in bulk. It's like the millenium fears becoming actualized the way prices of everything going up and the values of assets going down.

[ellie]

6. Here's an anecdotal story:

I noticed last month that the frozen vegetables I always buy at Kroger went from a dollar a bag to $1.39 a bag. And these are the store brand, not Del Monte or some other big frozen vegetable manufacturer.