Bad weather, gas prices drive up food prices

March 17, 2011 6:55:54 PM PDT
Just about all food prices have been rising and those high prices are probably here to stay.

Several factors are playing into the increase in prices: bad weather for planting and harvesting last year, gas prices going up, and fear in the market after Japanese tsunami.

The bottom line is that consumers are likely going to pay even more to feed their families.

ABC7 found some grocery shoppers trying to make their money go farther, but they say recently it hasn't been easy.

"Produce, bread, everything, milk, dairy. Everything is going up. But we got to eat," said Victoria Marro.

"You used to be able to buy a big bag of chips. I don't buy the big bag of chips anymore. My kids, they notice it. But we're losing weight then too," said Colleen Gill.

Irish soda bread is in demand for St. Patrick's Day at Happy Foods in Chicago's Edgebrook neighborhood. The local grocery chain is trying to stay competitive, and increasingly that means spending more time looking for the best prices from their wholesalers.

"That is the challenge, juggling to keep the prices down by going with more than one purveyor and whoever has the better deal at the time," said Beverly Homyk, Happy Foods.

Food prices had been sneaking up for decades. Shoppers with a long view have seen it. Ask retired professor Noah Marcell.

"Potatoes used to be $1.50 for 10 pounds. Today, 10 pounds is about $6-7, Idaho, whatever. It's horrible," said Marcell.

The way food is bought and sold has certainly changed over the years.

At the CME Group, grain floor traders hedge their investments with options and futures. Experts see growing demand on food worldwide and a finite amount of space on which to grow.

"We're pretty much like at our limit. If there's no more acres to produce, that begs the question of your perfect supply-demand scenario," said Virginia McGathey.

McGathey has been trading wheat, corn and soybeans for 30 years. She says the volatility of world events will impact food prices, and the overall trend is only going up.

"It's going to be very difficult for your average family to eat the way they normally have. I think that at some point they are going to change their eating habits," said McGathey.

Happy Foods sees the high-gas costs having the biggest recent impact on their costs. Their owner is trying to stockpile non-perishables and widen their network of wholesalers to try and find the best prices.