10/07/08 Food Prices Go Up...Again

Food Prices Go Up&Again. I'm Greg Martin with today's Line On Agriculture. Have you been to the grocery store lately? It seems that even though gasoline prices have been coming down, the price we pay for the staples is still going up. Every quarter, the American Farm Bureau does an informal survey to find out what prices are doing at the supermarket and not surprisingly, they have gone up. Economist Jim Sartwelle says lower acreage and bad crops caused big jumps in potato and apple prices, but energy costs are a big reason for other price hikes, even though oil prices have come down. SARTWELLE: Food prices in the third quarter of 2008 were up four percent relative to the second quarter of this year; year to year, up about 10 percent. We don't need to kid ourselves. Oil is not cheap. Electricity is not cheap. The cost of hauling food around, the cost of running plants to process food, the cost of keeping the lights on in the grocery store is not cheap and will not be coming down any time in the near future. Sartwelle says he won't be surprised if demand for meat products drops, due to consumer concerns about the general economy. SARTWELLE: There is no reason to expect any huge upward price movements from this point but there is actually less reason to expect to see a return any time in the near future back to prices that we enjoyed mainly from 2000 to about 2006. If you have been shopping recently you are seeing increases from TV's to toasters. It seems across the board we are seeing higher prices. SARTWELLE: We're looking at a $48.68 market by far the highest price em that we've that we've ever witnessed. When you look across the rest of the general economy it seems very consistent with the tremendous run-up, not only in food prices, but the staggering run-up that we've seen in other costs of living up to and including fuel and utility prices. So it would seem that someone is making a lot of money but according to Sartwelle, one thing that hasn't gone up is the farmers' share of the food dollar. SARTWELLE: The farmers' share of the retail food dollar remains stuck right around 20 percent where it's been for a few years down from a third of the retail food dollar in the 1980s. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.