Region feeling pinch from rising food costs
In February, food prices climbed at their fastest rate in almost three years and local residents, retailers and food pantries are already feeling the pinch.
The 0.4 percent overall price increase was pushed in part by rising meat, poultry, egg and produce prices, according the Bureau of Labor Statistics.
The East Grand Forks Food Shelf purchases many of those fresh food items regularly for its clients, according to Operations Manager Cristina Campos.
The shelf strives to offer fresh and healthy foods to its clients in addition to the usual nonperishable donations received from residents and businesses.
“What we get is what we issue (to clients),” Campos said. “What we don’t get, we have to buy … It gets to be pretty expensive.”
The food shelf spends about $2,000 each month buying fresh foods for its clients — a total that will likely grow as the Bureau of Labor Statistics forecasts overall food prices will increase between 2.5 and 3.5 percent this year. Last year, they rose 1.4 percent.
The bureau is predicting the highest hikes will come in beef, poultry, seafood and egg prices — forecast to increase 3 to 4 percent. Fruit and vegetable costs won’t be far behind with potential increases of 2.5 to 3.5 percent.
Other food products tracked by the service are expected to increase by at least 1.5 percent this year.
In addition to raising costs for consumers and food-dependent businesses, the price hikes could in turn lead to more people seeking out food pantry services.
Beverly Dolan, a volunteer with the Walsh County Food Pantry, said high food prices along with rising gas and heat prices are likely behind the pantry’s steady increase in client visits over the past few years.
On average, the pantry has seen an 11 percent increase each year for the last three years or so. Dolan can recall several times when the line has been out the door.
Like the East Grand Forks Food Shelf, the Walsh County pantry also purchases food for its clients when contributions from local food drives and the Great Plains Food Pantry aren’t enough.
“When we notice the bare spots, we go to the local grocery store,” Dolan said.
The food is distributed in pre-packed grocery bags that contain items such as cereal, canned or fresh fruits and vegetables and some meat products. The number of bags given depends on the size of a family.
Used wisely, Dolan said a bag could last an individual client one week.
In East Grand Forks, Campos said enough food is provided to families to last each member 12 days. Among those offerings is a portion of ground beef, which, for a family of five, is usually four pounds, she said.
Ground beef’s price per pound hovers around $5 in Grand Forks, but a potential 3 to 4 percent price increase tacks on another 15 to 20 cents per pound.
If the food shelf went through 20 pounds a week for the entire year at a price of $5.20, it would need an additional $208 its budget needs to cover the increased cost.
There isn’t any one thing consumers can blame for the food price increase, according to Tom Woodmansee, president of the North Dakota Grocers Association.
“There are many things behind it,” he said. “Weather was definitely a problem last year.”
One such weather problem is the drought that continues to plague California — the producer of more than half of the nation’s fruits and vegetables.
Last year was the driest year on record for the state. Nearly 72 percent of its land was still classified as in extreme drought or worse by the National Drought Mitigation Center as of Wednesday evening.
Fruits and vegetable prices rose about 1.1 percent last month after seeing five months of decline on the Consumer Price Index. The index is overseen by the Bureau of Labor Statistics and monitors changes in not only food prices but other products as well.
In addition to weather causing trouble, paying to move food has contributed to higher food prices, according to Woodmansee.
Unless cities are home to a grocery retailer’s distribution center, food may have to be trucked long distances to reach stores, he said. In 2011, the USDA estimated 3.5 cents of every dollar spend on food covers transportation costs.
Higher transportation costs don’t just affect customers through the price of food. Both Campos and Dolan agree rising gas prices make having enough money available to buy food harder for their clients and contribute to their arrival at the food pantries.
While last month’s food price increase was considered the highest jump since September 2011, the overall price increase predicted for the year won’t be the highest the country has seen in the last decade.
If the increase does hit the high end of the USDA Economic Research Service’s estimate, it would be the fourth largest in the past 10 years at 3.5 percent.
The largest increase in that time period came in 2008 when food prices climbed by 5.5 percent overall with some categories such as cereals and eggs seeing double-digit percentage leaps.
Since that year, price increases had slowed and dropped to 0.8 percent in 2010, rose to 3.7 percent in 2011 and then tapered off again.
Price increases have been steady on local shelves. An unscientific Herald survey noted in 2012 that a dozen eggs were priced at $1.67. Wednesday, a dozen cost closer to $2 — an increase of about 19 percent.
During that same period, ground beef increased by 22 percent from $4.09 to $4.99 a pound while iceberg lettuce increased by 7 percent from $1.48 to $1.58 for a head.
Though the overall food price increase for this year is pegged between 2.5 and 3.5 percent, severe weather could drive prices up even further, according to the Economic Research Service.
In response to the increases, Woodmansee said grocery stores around the state will likely pass on some price hikes but absorb others as much as their profit margins will allow.
To view the average retail prices of select food items sold in the Midwest and compare them with the rest of the nation, visit the Bureau of Labor Statistics at http://goo.gl/ZfF9wo. Read more about food price trends on reporter Brandi Jewett's blog.