Food For Thought

Posted: Friday, March 13, 2009 at 12:00 am
By: Doug Lund
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I used to enjoy going to the grocery store. Now..not so much. I just get mad.  Food shopping has gotten like buying gasoline last summer: you know you’re getting ripped off but there’s not a dang thing you can do about it. When the cost of food shot through the roof last year, we were told it was because manufacturers and wholesalers we’re shelling out record prices for nearly everything from grain to diesel fuel.  Well, now those expenses are half of what they were so why haven’t we seen those savings passed back to us?  It seems the laws of gravity don’t apply in the business world. Everything that goes up doesn’t necessarily have to come down. Food companies buy many of their commodity supplies on the futures market meaning they lock themselves in to a predetermined rate. Those contracts aren’t up yet so, they say, there are no savings to pass along. They didn’t have a problem, though, with “immediately” raising prices on products already in stock or on store shelves purchased at the old contract price. So who’s to blame for my box of Grape Nuts (which contains neither grapes nor nuts) going up a dollar and a half in the last year? Nobody apparently.  Some point the finger at the ethanol industry for using up a third of the corn harvest to make fuel. Farmers say, don’t look at us, our cost of production offsets any gains at the grain elevator. Grocery stores say they’re just as mad as we are. Several supermarket executives are planning to retaliate by shifting more of their products to house brands.   In the past, I’ve been willing to pay an extra few cents for name brand stuff hoping to avoid things like those chunks of stem I usually find in a can of “great deal” green beans or that cut-rate catsup that tastes like somebody at the factory left the vinegar spigot on too long. But that may have to change..especially when like today I noticed the savings on some store brand items are as much as 30 to 50 percent. Now you’re talkin’ real money. Please, no lectures on how food in this country is still such a bargain (it’s up around ten percent in 15 months) or how I shouldn’t eat so much anyway or about growing a garden this summer or clipping coupons and driving all over town looking for deals.  The fact is that, with a few exceptions like some perishable items, food prices are way out of line. Somebody is cashing-in on a situation that no longer exists. I read where one food company representative actually said that it would be foolish to lower grocery prices now only to have to raise them again when fuel and grain costs go back up as they are expected to do. Besides, he said..and I’m paraphrasing..customers are adjusting to the increases without a lot of complaint. Tell that to the elderly lady ahead of me in line at the grocery store who came up short at the check-out. She had accidentally grabbed the Nabisco oyster crackers for $3.49..instead of the store brand ones on special for a dollar.Same size package..same ingredients..a logical mistake but an illogical price discrepancy. 

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