By Karen Gaudette
Seattle Times staff reporter
When the cost of food climbs at a gradual pace it's easy to eyeball a shopping cart and estimate the cost of the groceries inside.
Not anymore. Food costs rose by 4 percent in 2007, and the U.S. Department of Agriculture predicts they'll rise by as much as 4.5 percent this year -- the highest food-price inflation since the early 1990s.
Elizabeth Peck, of Edmonds, says her family of four spends about $700 per month for groceries, up $100 from this time last year, despite shopping three stores (QFC, Trader Joe's and Grocery Outlet) to capitalize on the best deals offered at each.
She pondered the contents of her cart in the checkout line of one local supermarket on a recent afternoon. It was filled with such items as a whole fryer chicken (cheaper than chicken breast), prepackaged lunch meat (cheaper than the deli) and avocados on special.
"I bet you that's at least $100," said Peck, 32, who is raising two young daughters and has a third on the way with husband Kurt, a technical analyst at a downtown Seattle engineering firm. When the total exceeds $130, she vows to try harder next time.
"I feel like food is my No. 1 budgeting issue for my family. It's definitely the highest expense next to my mortgage each month, so it's a challenge."
Shoppers around the globe are sharing her experience in yet another example of our growing interconnectedness. From Beijing to Bellevue, Edinburgh to Everett, we're devoting more of our incomes toward food. Number of factors
The fact that food prices are fluctuating is normal. Every society has, at times, grappled with droughts that prompt price increases or bumper crops that send prices plummeting.
What's unusual this time is the number of factors involved, economists say:
â€¢ Rising fuel prices make it more expensive to grow, harvest, transport and package food.
â€¢ Greater demand for bread and meat within the booming economies of China and India means a greater share of grain harvests heading east to be ground into flour or fed to livestock.
â€¢ A growing desire for fuel produced from corn has shifted farmland from feeding people to filling gas tanks.
â€¢ Droughts in Australia and Russia have further crippled an already dwindling grain harvest.
But the principle of supply and demand (higher demand + less supply = higher prices) alone does not explain the situation, said Hendrik Wolff, an assistant professor of economics at the University of Washington. Speculators who try to predict trends such as how much coffee Chinese workers will sip by 2010, or the amount of grain bakeries will buy come fall, increasingly factor into the equation, as their influence affects prices.
"Just as exchange rates go dramatically up or down on the stock market, there's a similar phenomenon with food commodities," Wolff said. "If some leading expert in the industry thinks prices will go up or down, others may follow him."
For Aimee Sheridan, a single mother of four in Lake Forest Park, the sum of all those factors is less variety on her dinner table. She switched from delivery to take-and-bake for her family's special Friday pizza nights about six months back. That was when she realized she was spending a small fortune just on the nearly six gallons of milk that her three sons, daughter and their visiting teenage friend drink each week.
With food prices still climbing, she's had to eliminate pizza night altogether, along with takeout food another night each week. Her kids skipped skiing and movies this winter. To save more, Sheridan walks through the house turning off lights, and she arranges car pools whenever possible. Dinners are a rotation of affordable, quick-to-cook standards: Grilled chicken, tacos, spaghetti, chili.
"It's the eating-out part now that we've really cut back on, not necessarily because it's gotten more expensive. It's just that the grocery bill has gotten more expensive."
"Long term, who knows?" said Sheridan, 39, director of development for the Boys & Girls Clubs of King County and an Albertsons and Costco shopper. "We might have to plan meals based on what's on sale in the store." Changing habits
Americans on average still spend a smaller portion of income on food than people in nearly any other country in the world, despite these recent increases. Should prices continue to rise in the coming years, however, it could significantly shift in how we spend our money.
As a nation we have spent less than 15 percent of our disposable personal incomes on food on average since 1966, and less than 10 percent on food this entire decade, based on the latest figures from the U.S. Department of Agriculture.
In 2006, Americans devoted about 7.2 percent of our budgets to food consumed at home, versus 9.3 percent in Canada and 24.5 percent in Mexico.
Food has grown increasingly affordable over the decades as farmers and retailers alike grow more efficient and supermarkets and discount-warehouse stores compete for customers, said Bill Greer, a spokesman with the Food Marketing Institute, an industry group.
In the past when times were tough, consumers have switched from beef to less-expensive chicken, clipped more coupons and compared prices more carefully from store to store and even product to product, Greer said. So far, the industry is noticing the latter two habits, along with shoppers making trips to different stores in search of bargains rather than relying on one-stop shopping.
"One interesting thing that's really an unknown at this point is you have people who are 46 and younger and they really never experienced food inflation before. We've had such a long stretch of time with really no food inflation. It's hard to predict how this group is going to react," Greer said.
For some, price remains no object when it comes to food. But for everyone else, particularly lower- or fixed-income shoppers and families with growing kids, rising prices have meant changes.
Peck, the Edmonds mother, bargain shops for granola bars and other treats when it's her turn to bring snacks to her daughters' classes. She thinks harder about the cost of what she'll volunteer to bring to the rising number of potlucks friends are throwing to cut party costs. She's disappointed that she can't afford to buy organic milk and produce as often anymore.
Rarely does she put produce back due to cost. But three months ago, she passed on grapes after the produce scale showed the package would cost about $9. What's to come
The United Nations' Food and Agriculture Organization predicts higher prices for the coming decade, and that has prompted much debate among world leaders about the best use of the globe's farmland. Shifting acres to biofuel production eases our environmental impact. But anti-hunger groups wonder whether that's prudent use of land that could have yielded something edible.
Bread and other staples cost so much in nations such as Egypt and Haiti that the United Nations has called upon richer countries to help immediately, to discourage rioting and violence and quell hunger. An unstable food supply, they say, could destabilize already shaky governments.
Here at home, bakers wonder whether we should ship so much wheat overseas when local prices have skyrocketed.
Leaders of the West Seattle Food Bank say they're seeing dozens of new faces and have had to buy food to supplement dwindling donations. The parking lots at bakery outlet stores keep getting busier.
When we're busy tightening our own belts, Sheridan said, it's harder to remember that someone always has it tougher.
"I always worry that people get pretty panicked about that and forget that we're still a community, and we still need to take care of each other."
Whether the source is 100% accurate or not, it's rediculous how one "crisis" (i.e. oil/gas price increases) sets off a chain reaction of either panic or greed. Sure, I can see products made directly or indirectly from oil (e.g. resins/platics) increasing in cost. Yeah, it might cost a little more to transport products. But in this case....foods....there's a lot of B.S. in play. Everybody's jumping on the bandwagon, and we have to pay for it.
Especially in the poorest parts where people spend a large percentage of their income on food.
actually, I've read a very convincing article in an academic journal that its not. If more efficiencies were obtained in agriculture (such as having the whole world eating GMO) we could handle a lot more...up to three time more people. Also, there is a lot of wasted land. Take a look at the US....half the great plains states and rocky states are still "frontier".
Steamed shoppers pay nearly double for rice what it cost last year .
BY STEPHANIE GASKELL
DAILY NEWS STAFF WRITER
Thursday, April 24th 2008, 4:00 AM
"I'm not buying as much as I used to because the price, it's too high. Money's short right now. You gotta buy gas," says Fred Thomas.
First we face a gas crisis. Now it's the price of rice that is hitting New Yorkers hard as the nation's shopkeepers confront shortages and several states have even started rationing.
Exploding global demand, poor yields and droughts have driven up prices throughout the world - and the impact is quickly being felt at home.
The price of a 20-pound bag of rice has increased to $16 from $9 in New York over the past year and is poised to soar even higher.
"I try not looking at prices anymore because it's very disgusting," said Louise Maniloff, 87, of Roosevelt Island, who shops only when her grocery store offers seniors a 10% discount.
Selina Chen, 40, of Flushing, Queens, traveled to Edgewater, N.J., Wednesday in the hopes of finding a better price for rice.
"We try to buy extra," she said. "But we don't really have a choice. We have to eat." Sam's Club and Costco - the two biggest U.S. warehouse retail chains - are limiting how much rice customers can buy because of what Sam's Club called "recent supply-and-demand trends."
Sam's Club will permit customers to buy only four, 20-pound bags at a time of imported jasmine, basmati and long-grain white rice. The chain declined to say if this is the first time it has restricted sales of bulk foods. USA Rice Federation spokesman David Coia insisted there is no rice shortage in the United States, "even though there is a perception there."
Coia said the wholesale chains have been hit because small restaurants and grocery stores are stocking up at the big stores to avoid rising costs. "They see the prices going up in foreign markets," so they try to save money by buying in bulk, he said.
In Chinatown, at Bangkok Center Grocery, one of the main suppliers of Thai food products in the city, manager Tom Pongsopon said the price of a 25-pound bag of jasmine rice at his store has gone up to $20 from $15 in a matter of months. "We have enough for now, but I'm not sure about the future," he said.
Relentless demand from developing countries and poor crop yields have pushed rice prices up 70% this year - raising concerns of severe shortages of the staple food for almost half the world's population.
The increases have followed jumps in the price of wheat, corn and soybeans that have added to Americans' growing grocery bill and led to violent food riots in poor countries, including Haiti, Senegal and Pakistan.
Most of the rice eaten in the world is consumed within 60 miles of where it was grown, said Nathan Childs, an economist and rice expert with the U.S. Department of Agriculture.
U.S. production of long-grain and medium-grain rice is strong, and the global crop is larger than ever, Childs said. But with several major exporters, including India and Vietnam, shunning foreign sales to control prices at home, the price of rice has been climbing to new heights.
"Most suppliers have raised the price," said On Le, manager at Monster Sushi in Chelsea. "Everything has gone up, and that means less customers." Michael Klein, a spokesman for C-Town stores, said the chain is bracing for shortages. "We don't have a shortage of rice, if you want to pay the new price," he said. "But if you're trying to say, 'I want the rice for the old price,' then there's a shortage."
Fred Thomas, 52, a mechanic from Queens, said he's finding it hard to feed his five kids. "I'm not buying as much as I used to because the price, it's too high," he said as he shopped in Astoria. "Money's short now. You gotta buy gas."
1. Population growth. More people in places like China and India are entering the middle class and consuming more rice.
2. Fuel and fertilizer. Farmers have been hit by the rising cost of fuel and fertilizer. 3. Wall Street. Investment firms and hedge funds are driving up prices by trying to profit from the rising cost of rice and other commodities. 4. Development. Many countries are building hotels and golf courses on once-fertile rice fields. 5. Weak dollar. China stopped exporting rice due to the weak U.S. dollar.