Report: Food prices to continue decline

Tim Landis

Food costs down, fuel prices up. A new government report on wholesale inflation had a familiar ring for Amanda Wittenauer.

“If gas bills or gasoline go up, you learn to live with it in other areas of your budget,” the Southern View resident said Tuesday while shopping for her family at the County Market in Springfield.

Almost to the hour when the report came out, gasoline prices jumped by 25-30 cents a gallon at many local service stations, to as much as $2.09 per gallon. Similar reports came in from across central Illinois on the daily tracking site gasbuddy.com.

Crude-oil prices jumped $1.81 per barrel to $49.16 Tuesday on the New York Mercantile Exchange. Analysts said the increase was in anticipation of the summer driving season and signs that demand has leveled off.

Even after the spike Tuesday, gasoline at $2.09 per gallon compares to a local average of $3.35 per gallon a year ago, according to AAA Chicago. An informal newspaper survey of local supermarkets showed a gallon of milk that sold for $4 a year ago was at $1.99 in a number of local stores Tuesday.

A just-completed forecast from the U.S. Department of Agriculture Economic Research Service also suggested consumers should continue to see relief at the supermarket this year when buying beef, eggs, dairy products, fruit, vegetables, bakery products and cereals after last year’s record surge in commodity prices.

The federal agency predicted “low-to-moderate food-price inflation” in 2009, based on the current pace of commodity and energy price increases.

“It’s really been a roller coaster with where prices are going,” County Market store director Steve Rakers said.

Supermarket managers sometimes “get an earful” when food prices spike, such as the surge that took milk to $4 per gallon last summer, Rakers said. But the industry also has shifted tactics by offering less expensive private-label brands and by emphasizing economy in store displays, he said.

“It’s a very competitive environment, and we’ve all had to adjust to the economy,” Rakers said.

The big jump in food prices in the past year touched off a public relations fight between supermarket chains demanding lower costs and major wholesalers, who said they were locked into last year’s high commodity prices.

Divernon resident Helen Goddard said she adjusts for both fuel and food prices when making the round-trip to shopping destinations from the community south of Springfield. Though she said she and her husband, Herman, are retired, she said he still keeps busy with an auto-repair business, and she does the books.

Goddard said she tries to stick to her shopping and driving plans.

“I try not to go over $50 when I shop (for groceries). We also have a market in Pawnee (east of Divernon) if I need a loaf of bread or milk,” she said.

Tim Landis can be reached at (217) 788-1536 ortim.landis@sj-r.com.