April 10, 2007
Gas prices continue to rise, meaning the cost of consumer goods is rising as well. However, that precious petroleum isn't the only thing factoring into your pocketbook.
Take higher gas prices, weather damage to crops, and the use of corn to make ethanol, add it all up and it equals higher prices of food on the grocery store shelves.
“You'll see prices fluctuate from week to week,” said Kim Miller of Reid’s Super Market.
Miller knows all about food prices.
“Right now, we're seeing the increases in onions,” said Miller.
She is in charge of all the bookkeeping and buying of supplies at Reid's Super Market in Charlottesville.
“We watch for the best price where we can for different items, so we have a variety of suppliers we try to buy from,” Miller said.
No matter where you look, food prices are increasing.
Miller tells us when she gets a bill from a supplier, at the bottom of the ticket is a charge added to the cost of the good.
“You begin to see fuel surcharges at the end of invoices,” Miller said.
The high cost of fuel is not the only reason for higher food prices. Cold temperatures have ruined crops, and large amounts of corn are used to make ethanol.
“One important fact about corn is even though we don't notice how much we consume, corn is reflected in about 40 percent of an American’s diet, whether it’s in high fructose corn syrup or in feed products for other foods that we eat,” said Peter Rodriguez, Associate Professor of Business at UVa.
That translates into bad news for farmers not growing corn.
“Beef prices have been down for a number of reasons. They've also been affected by high corn prices which cuts into the margin for cattle ranchers,” said Rodriguez.
No matter what it takes to get the goods to a shelf near you, it's your pocketbook that will pay for the increase.
“Unfortunately, we do have to pass it on. It becomes part of the price of the good. So it then becomes figured in to what your cost is,” said Miller.
The experts we spoke with say they're surprised gas prices have not surged sooner, but added prices will only get higher as summer rolls around.
Early estimates predict gas prices similar to last year's.