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May 14, 2008 11:08 pm US/Central
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Perfect Storm Of High Food Prices Could Get Worse
(WCCO)
Families looking to save a few extra dollars won't find relief at the grocery store. Between April and March prices for the food we eat jumped nearly 1 percent. That's the largest increase since 1990.
It turns out a perfect storm of factors is hitting consumers all at the same time.
At Jerry's Foods in Eden Prairie customers are heading for the ground beef because its on special. With a buy one get one free coupon, Mary Erickson saved $4.02.
Professor Om Narasimhan from the University of Minnesota Carlson School of Management says consumers should expect prices to continue rising.
"This would last another couple of years at least and that we should be getting used to fairly high food prices," said Narasimhan.
He said four forces are creating a perfect storm and driving up prices.
• Oil
• A drought in Australia that's making wheat and rice more expensive
• Soaring food consumption in China and India
• U.S. prices on corn because of ethanol
As prices rise, customers are changing how they buy groceries. At Costco sales are up by 8 percent. At its St. Louis Park location, people buying in bulk.
The Mesa family lives by Lake Nokomis in South Minneapolis but makes the trip because of the deals.
"We get pretty good prices right here. Every week we're here," said Joe Meza.
Another tip to avoid paying big is head online. Stores are turning to their Web sites to offer specials. For the stores, it saves them money in advertising costs and, in turn, lowers what you pay.
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