Feb 17, 2011 Ami Olson Uncategorized
The United Nations Food Price Index showed an increase for the seventh consecutive month in January, with global prices for food commodities hitting their highest mark since the UN began backtracking prices in 1990.
The FPI, which measures monthly changes in international prices of a basket of five food commodities (meat, dairy, cereals, oils and fats, and sugars), rose to an alarming 231 points to start off the new year.
By contrast, the average FPI just 10 years ago, in 2001, was 93 points.
“The federal government is predicting that average food prices will increase up to 3 percent this year, but the cost of some things have already begun moving much higher,” said Tops Friendly Markets representative Katie McKenna. “Beef was up 6.2 percent at the end of last year compared with a year ago. Pork has jumped 12.9 percent.”
Adding to the cost of the food itself are rising fuel costs, which account for increases in shipping and packaging costs, said Evelyn Carter, director of consumer affairs for Wegmans Food Markets.
But making sense of global numbers in terms of baskets of food raises one concern for consumers: how long before those prices become unrealistic for the average household?
Insulated for now
For the time being, most grocery retailers can keep from passing those increases on to customers.
Carter said Wegmans has been able to absorb most of the increases.
McKenna said Tops has also managed to offset most costs, especially be negotiating special deals and discounts to customers.
But where’s the breaking point?
“When you hear that it’s a worldwide food crisis, that’s really scary,” said Paul Nojaim, co-owner of Nojaim Brothers Market at 307 Gifford St.
He said he’s been reading reports for years of rising costs, though the most devastating shifts haven’t hit his shelves, yet. And some experts argue that grocers won’t ever experience overwhelming price increases, though the steady rise is undeniable.
Either way, food retailers don’t have many options for how to handle the increase.
“It’s a commodity. And perishables are perishables. There’s not a heck of a lot you can do,” Nojaim said. “We’re kind of still waiting for it, I guess.”
Of more immediate concern is the impact unusual weather events are having on produce prices.
Nojaim said freezing temperatures on the west coast have driven up produce prices and his customers have noticed.
Jamie Kluk, head grocery clerk for Syracuse Real Food Co-op, at 618 Kensington Road, said he’s noticed produce prices on the rise in other grocery stores and while the Co-op hasn’t experienced the shift yet, he expected it to be felt first in citrus fruits.
Buy local boost
The common thread between the rise in food and fuel costs and the distance foods are transported to reach consumers highlights one of the principles of the “buy local” movement gaining momentum across the country.
“Now, more than ever, consumers want to know that the food they buy is grown and produced locally, and it’s important that we have those products in our store,” said McKenna. “Buying local cuts down the distance it takes food to travel to our stores making it more cost effective and we’re able to pass the savings to our consumer.”
Chris Fowler, founder of the buy- and live-local campaign SyracuseFirst, said he didn’t expect rising food prices to “have a tremendous effect” on the number of people taking the pledge to buy more locally in the Syracuse area.
“Most people doing it are doing it for personal or philosophical reasons,” Fowler said.
Amanda Gormley, marketing manager at the Co-op, said the expectation that locally or regionally produced foods are typically more expensive may help offset the discomfort of rising costs, for those who are already buying local.
But that stereotype is being tested, Gormley pointed out.
The Basics Program launched last year by the Co-op offers staples like milk, meat, bread and fresh produce at about 25 percent below the suggested retail price, Gormley said.
Making locally and regionally produced organic foods more affordable may not help drive down the costs of the FPI, but it can make a significant difference in an individual’s grocery bill.