As I started the checkout process on a pre-dawn foray at the local supermarket, a hideous electronic wailing commenced at the nearby exit door, where the previous customer was leaving with her shopping cart. A synthesized voice boomed: “Please return to the store.”
I wasn't aware that the store had installed a stanchions-type security system for departing customers to pass through, and watched as the checkout clerk motioned for the obviously flustered customer to come back.
“It's probably your steak,” the clerk said. “The security label may not have been deactivated when I scanned it.”
She passed it over a deactivator bar, and sure enough the shopper was then able to leave without triggering the alarm.
Whoa! Beef is now so valuable that the supermarket has to put security labels on it?
Welcome to the wonderful world of grocery shopping, where prices are escalating faster than a NASA space rocket.
On that same trip, I thought early morning brain fog was playing tricks when I saw apples priced at $2.57 per pound! There is, to my knowledge, no shortage of apples anywhere in the world, yet a product that a year ago was 89 cents a pound is now three times as much?
In 2007, government economists tell us, core inflation (excluding food and energy) rose just 2.4 percent over the previous year, but consumer prices overall (including food and energy) were up 4.1 percent.
The price increase for food/beverages was 4.9 percent — the sharpest increase in 17 years. But within that “average,” according to industry sources, dairy prices were up 13 percent, meat up 6 percent, bakery products up almost 5 percent, fresh vegetables up 23 percent (potatoes 66 percent, tomatoes 68 percent), fresh fruit up 32 percent; beef now requires a bank loan (and security measures); and many of the thousands of food items that have corn as an ingredient saw sizable increases.
“We haven't seen an increase in grocery prices of this magnitude since 1990,” a government economist says.
“The era of cheap food is over,” says another.
There has been a lot of yammering back and forth between various interest groups as to whether the ethanol boom has been responsible for the run-up in food prices. The grains people somewhat defensively say no; consumer groups say yes.
The truth probably lies somewhere in the middle. It stands to reason that high corn prices make beef and poultry more expensive to produce, that high wheat prices push up the cost of baked goods, that diminished supplies of corn and wheat increase substitution of rice, resulting in higher prices for that commodity, and that those prices will filter through the food chain.
On the other hand, one can't ignore the effect on price of increased demand in foreign markets — particularly China, India, and other eastern nations where rising incomes are allowing more spending on previously unaffordable foods.
But escalating energy/transportation costs continue to be a key inflationary component of every item in the food chain, and labor, marketing, and other middleman non-farm costs still represent the majority — about 80 cents — of each consumer food dollar.