Gas Not Alone -- Food Prices Way Up, Too

Experts Tell What's Behind The Rise And How To Keep Impact Down

(CBS)  It's not just gas whose rising price is putting the squeeze on our pocketbooks.

Food prices have been steadily increasing, as well.

And, says Stew Leonard Jr., president and CEO of the Stew Leonard grocery chain, it's those higher fuel prices that are "at the root" of steeper grocery bills.

He told Early Show co-anchor Harry Smith the tuna fisherman his chain uses tells Leonard it used to cost him $250 a day to go out on his boat, to put fuel in his boat, and now it's $1,000 a day. That cost has to be passed on."

Early Show national correspondent Hattie Kauffman points out that, "If it costs truckers more to fill their gas tanks, it'll cost more to ship produce around the country."

Other factors behind food taking a bigger bite out of consumer pocketbooks, Kauffman reports, include the falling dollar boosting prices of imported foods such as pasta, and large amounts of grain going to ethanol production and to other nations, cutting supplies here.

Some bakeries are struggling just to break even, Kauffman notes.

"The price of flour today is about four times the amount of price that it was in August, and it's going up on a weekly basis," says >Moshe Hecht, co-owner of the Schwartz Bakery and Cafe in Los Angeles. "But it's not only flour that it's affecting. It's also affecting eggs, oil, and everything that goes along with it" in producing baked goods.

Kauffman notes that gas only takes up about four percent of the average family's budget, while food accounts for roughly 13 percent.

Milk prices have shot up almost 18 percent in the last year, says the U.S. Department of Agriculture, and eggs are nearly 35 percent.

And a gallon of milk costs less than a gallon of gas.

Still, observes Leonard, "There hasn't been an explosion (in food prices). It's not like anything for people to panic about.

"Our milk right now is $1.89 a half-gallon. ... You were talking about it being ($3.50) a gallon, so you can get some good deals out there.

"I think the thing that people want to do right now is eat home more. You know, eating out is expensive, and if you can cook and prepare your food at home and with fresh local ingredients, it's really important."

Locally-grown ingredients don't cost nearly as much to ship as ones that have to come from far away, he explained.

And eating, say, meatloaf instead of more expensive cuts of meat can also help, Leonard said.

[hypnotoad72]

Conserve when you can. People did so during World War 2.

Railway usage could go up; it''s far more efficient than trucking too...

[tahoerobert]

This money crunch could be good for America''s waistline. At the same time I wish all parents well in their qwest to lower expenses. There''s going to be riots in the cities when the coming financial collapse occurs. Save your pennies children.

[bookwerm314]

Good! With these cost increases for transportation, there WILL be a big economic incentive for LOCAL production of food and goods.. once you have this large "tax" hitting stuff, it will be much less feasible to ship stuff in from China, and other timbuktu places.. good for America! We need to massively increase our reliance on domestically produced renewable energy.. energy we pay twice as much for locally is HUGELY more valuable to us as a society than cheap energy bought overseas! The money stays IN our economy, instead of being bled out! We must become much more self sustaining.. I look forward to a new Administration that has more strategic vision than this current set of fools that are toadies of the rich.

[jerbear103]

My comment would be the person reporting that milk is $1.89 a half gallon and someone said it was $3.50 a gallon so there are still good buys out there, and it is cheaper than gas. Now I know new math is in the schools but last time I checked $1.89 x 2 = $3.78 a gallon. SOME BARGIN!!!

[adamsrib2]

It should be a surprise to no one, that high fuel prices are the main driver for higher food prices. We are extremely lucky to have our food prices as low as they are.

[forthepeopl1]

I JUST PAID 4.25 FOR A GALLON OF MILK LAST WEEK IT WAS 2.99 A GALLON..

WAIT UNTIL NEXT WEEK, IT SHOULD BE 5.25 A GALLON..

THANKS BUSH

[bellazmo]

While rising fuel prices are a major contributor to the rising cost of food we have to remember that petroleum products are used in packaging as well as in the machinery wrapping and moving products.

Additionally, think of how much its costing farmers to plant, care for and harvest their crops but farmers are price takers, they cant adjust their price because of input costs like a grocery store or resturant can.

[ov442]

What else can I do? ---Posted by HybridPlugs

Good job. Try installing a small tower windmill on your property to power a water pump to pump groundwater into your house and for watering garden and yard. And/or place large plastic bins under downspout waterways from your roof to catch water normally wasted by runoff; reuse that water for same.

Install geothermal heat pump system for heating and cooling and get rid of gas furnace, gas water heater, A/C unit if you have them.

[ov442]

"Kauffman notes that gas only takes up about four percent of the average family''s budget,"

I make the median household income according to the IRS and the Census bureau, and my gas cost is 13.8% of my household budget.

[cyberus-2009]

Well duh .. petroleum products from fuel to fertilizer are used to grown, pick, and transport food it shouldn''t suprise anyone that food prices are rising

[grandmalee-2009]

Katie, your comments on higher food prices are well taken, but would you please do a feature on the escalating prices of crop imputs for farmers. Fertilizer and chemicals follow the price of oil as many are oil based products. They are also up over 100% from last year. We have to pay the increased prices at the grocery store, too, but if commodity prices stayed the same and the imput prices went up the way they have it would be a disaster. Please let the American public know what the American farmer is facing. Thanks from a farmer''s wife.

[bobbyfontain]

Then last week, as Bush was blaming OPEC for not pumping enough oil while pushing for adding 20% ethanol to gasoline rather than 10 with ethanol conferences going on quietly all over Washington DC, which from all my indicators, ethanol mixed with gasoline in most cars causes them to lose as much mileage as the percent of ethanol added, which means it%u2019s not burning and coming out the tailpipes which makes it a totally useless fuel unless you are selling it. But OPEC defended itself against Bushes rhetoric lending some clarity to my quest for answers.

See we here in the United States have so much pride in our dollar that we%u2019ve failed to recognize that its instability has lead to much of the world not looking at it as a guide to set their own standard by anymore. So while our dollar weakens, we are told the price of oil is going up. But OPEC set the record straight in defense saying that there is plenty of oil while for many countries, the price is going down as they look to the Euro for stability because as our dollar weakens, the Euro has been strengthening.

[100mpg]

Put in all compact florescent lighting in the house. Check
Built and use a Solar Oven when I can. Check
Buy a hybrid. Check
Convert it to get 100mpg as a plug-in car. Check
Hook up solar panel to get some free power. Check
Practice telling 12 year old "No" when we go to the store. Check.
Plant a vegetable garden this year. Planting now
What else can I do?