16 months ago
SACRAMENTO, CA - The USDA and major food companies say food prices are about to get higher -- a lot higher.
Not only is grocery shopping a chore, it is quickly becoming an expensive chore. Chanel Jones walked out of a local supermarket a little dazed by the prices. "Chicken used to be $2.41 for 12 drummettes," she said. "Now it's like $5 and something."
The U.S. Bureau of Labor Statistics said in the first five months of 2008 food prices rose 6.3 percent. Managers at General Produce in Sacramento, a food wholesaler, said their retail grocers have been holding off raising prices to the consumer, but it can't go on.
"They're getting fuel increases, and they are passing those along. To stay in business it has to come to that," said Mike Malena, a sales manager at General Produce.
The cost for Malena to fuel his delivery trucks this year has ballooned by $1 million. General Produce is a family-owned company that won't be able to absorb the cost any longer.
"When it gets radical like this, what do you do? It's a messy situation," Malena said.
The demand for corn ethanol has big corporations like Sara Lee and Kraft saying they can no longer absorb the costs and expect to raise prices as much as 25 percent on products like macaroni and cheese, corn flakes and cookies.
"Anything we eat that is made from corn or fed by corn is going to increase dramatically over the next few years," said Scott Faber of the Grocery Manufacturers Association of America.
Fuel prices are huge factor in the price hikes, he said, but it is the cost of corn that is pushing prices up more than anything.
Economists expect the 25 percent increase won't be the end. Food prices will likely continue to climb throughout 2009.
News10/KXTV
