Shoppers feel pinch of rising food prices
BY THE OKLAHOMAN & TULSA WORLD REPORTS
Sunday, March 18, 2012
3/18/12 at 5:01 AM
Food prices are taking a bigger bite out of consumers' budgets after a 5 percent increase in 2011.
During the recession, many grocery retailers tried to absorb cost increases, fearing that raising their prices would cause customers to shop elsewhere, said John Anderson, a senior economist at the American Farm Bureau Federation.
"Retailers don't want to lose market share," he said. "That kept a lid on things."
But last year they felt confident enough to pass on the increase to consumers. The good news, Anderson said, is that he believes food prices will likely settle down in 2012.
But shoppers, many of whom are already financially squeezed, are stretching their food dollars.
Janyce Myers, who recently was buying groceries in Edmond, said she is combating the increase by using coupons and comparing prices at multiple stores.
"Honestly, I think everything has gone up," she said.
Another area shopper said budgeting has become more difficult, since he depends on disability benefits and food stamps to feed him and his wife.
In Tulsa, demand at nonprofits such as the Community Food Bank of Eastern Oklahoma has been growing, while food prices are rising.
Part of the rise in demand is that food is taking a bigger bite out of most people's wallets.
In Oklahoma, household income has grown at a rate of about 2 percent a year since August 2001, while the prices of core commodities such as bread, ground beef, eggs and other items expanded at double the rate, according to the August 2011 consumer price index.
While some observers such as Anderson believe this year may not see dramatic jumps in food prices, the longer-term outlook is not as encouraging.
Yaneer Bar-Yam, head of the Boston-based New England Complex Systems Institute, studies global problems.
The theorist recently displayed a mathematical model that shows food prices peaking a year from now.
That peak, he said, would be higher than the 2011 bump.
Meanwhile, food prices may be looking more stable this year across the board, but some specific staples continue to rise.
Lately, price increases have been seen in sugar, after leading exporter Brazil encountered bad weather, as well as oils and cereals.
Dining out less often and preparing more meals at home are strategies many people are using to cope with higher food prices, the Farm Bureau says.
To analyze the savings, if any, The Oklahoman compared two similar meals - one eaten at a restaurant and the other prepared at home. Pizza was chosen because it's universally popular, relatively affordable and simple to compare.
The result? A homemade meal for a family of four cost $15 less than the restaurant meal; it also had a lot more food left over.
The restaurant total was $50, compared with the grocery bill of $35.
The largest slice of the meal - the pizza - was more expensive at the restaurant: $30 compared with $19. Drinks were a significant difference.
For less than the price of one iced tea at the restaurant, a family could buy a box of 16 tea bags - enough to brew four pitchers.
Salad cost more at the grocery store - $9 compared with $3 at the restaurant.
However, the groceries, which included a bag of chopped lettuce, whole tomato, box of crackers and bottle of dressing, will last much longer than the single-serving of salad eaten while dining out.
A huge difference was seen in the "extras," where the waiter's tip of $8 far outpaced the 9 cents estimated for electricity to power an oven for an hour.
Not only did eating out cost more, it didn't save any time, the test found.
The time to be seated at a restaurant and served a meal was about the same as making it from scratch and eating it at home.
The Tulsa World Business staff contributed to this story by Jennifer Palmer of The Oklahoman.