Fuel Prices Drive Up Food Prices

By: Stephanie Diffin Email
By: Stephanie Diffin Email

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April 27, 2011

Whether you're fueling the car or feeding the family, it's no secret prices are up.

"It costs me about $200 to fill up. I do that about every week. So what do you do?" said Wichita driver Bruce Holmes.

"I know people are trying to bargain shop with gas now," said Wichita driver Kyra Henke.

Local consumers seem to also be bargain shopping for food.

"We have settled for going to Aldi or even the Dollar Tree for some of the boxed stuff," said Henke.

Experts say food prices are a result of more expensive fuel driving up the cost to transport goods to grocery stores. In late 2010 energy costs had increased 3.5% over the year. By March, that number had jumped to 15.5%.

"It's energy that's driving up, so right now food hasn't been driven up very much, but energy has," said Jeremy Hill, the Director for the Center for Economic Development and Business Research.

Hill says food has increased at about the rate of core inflation, which he says is healthy for recovery. He says there will only be a problem if energy costs continue increasing dramatically into the summer, which he says is not a serious concern at this point.

"We're consuming more, we have more demand for it, and that's a healthy part of a recovery. The only problem is if it continues to increase, [that] is when we have the price instability," said Hill.

And Hill says, the high prices will be hitting where it hurts, which is lower and moderate income families.

"If movie prices go up the consumers from the low income would just not go to a movie. But food you still have to buy as a necessity," said Hill.

It's a reality all local consumers already appear to be dealing with.

"I think people are buying off-brands more, you know private label, more than they are the name brand," said local consumer Jason Salas.

"We really have to budget and pinch pennies basically every time we go to the grocery store, and really shop around for the best deal," said Henke.

Hill says another way food prices could increase in the future, is when farmers start bearing the cost of higher energy prices, forcing their production cost to increase.


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