This is an archived article that was published on sltrib.com in 2007, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
If you're finding how much you pay for groceries these days a little hard to swallow, you're not alone.
Grocery prices nationwide are increasing faster than the overall inflation rate of 2.7 percent. The price consumers pay for food at home shot up 4 percent in May, surpassing the 2.5 percent rise predicted by the U.S. Department of Agriculture at the beginning of the year.
"Instead of buying tons of things to make a real meal, I buy ready-made meals," said Kim Millard of Salt Lake City. "You spend less money that way."
Meals are not as healthy, she added, but they are what she can afford.
High energy prices and the consequent recent push for alternative fuel sources such as ethanol are behind much of the price jump, said Kelly Matthews, a regional economist for Wells Fargo Bank in Salt Lake City. Most of the United States' ethanol is made from corn, wheat or soybeans - three staple crops in food production.
"When you start talking about corn, wheat and soybeans, you have a big impact on almost all areas of food, whether it's food consumed directly, or whether we feed it to animals and consume the milk or the meat from the animals," he said.
Utah's food producers say they also are feeling the pain.
"We're paying the same prices for food at the grocery store that everybody else does," said John Wadsworth, who grows alfalfa and runs cattle on his ranch in Hurricane. "We're not exempt."
In addition, Utah farmers are paying the same high prices for fuel, and they are not benefiting from corn-based ethanol, which is driving up the costs for feed.
"I'm paying $270 a ton for corn that cost me $140 a ton last year," he said. "I'm planning to sell off my calves because it's too expensive to keep them."
Prices for meat, poultry and fish are up 6.1 percent, compared with a year ago, said Jim Wood of the Bureau of Economic and Business Research at the University of Utah, citing data from the U.S. Bureau of Labor Statistics.
Fruits and vegetables are also more expensive, up 6.7 percent this year, mostly because of unfavorable weather conditions such as the freezes in California earlier this year.
"It looks like from what they say nationally, it will be the biggest year since 1990 in rising food prices," Wood said.
The most recent data specific to Utah's food prices are from January, when prices were up 3.8 percent, compared with a year earlier. Since then, Wood estimates the state is staying consistent with national price patterns.
Higher food prices affect some Utahns more than others. Utah has the seventh-highest rate of food insecurity in the nation according to a 2005 USDA study; 14.5 percent of the population is at risk of going hungry because of a lack of resources. And Glenn Bailey, director of Crossroads Urban Center, a food pantry in downtown Salt Lake City, said more people are requiring emergency food assistance on a routine basis.
"Throughout the network [of pantries], we are serving more people," he said.
His agency 18 months ago started the Community Food Co-op of Utah with the goal of providing a cheaper alternative to the typical grocery store. The co-op, which can save members as much as 50 percent off grocery-store prices, deals directly with wholesalers and purchases in bulk. Families may join the co-op regardless of how much money they make.
Like Salt Lake City's Millard, many Utahns and their families already have changed the way they shop.
When Natalie Manzanares noticed what the higher prices for meat and other necessities were doing to her monthly budget, she started looking for "10-for-10" deals, which allow her to get 10 items for $10.
In Jenny Caldwell's household, too, they have had less meat than in the past, she said.
Both Salt Lake City women said they'll continue to cut back if prices continue to rise.
If oil prices were to fall or stabilize, Matthews said, then food price increases would stabilize, as well, but the likelihood of that happening is not very good.
Over time, high food prices negatively affect the overall economy, Wood said. Food is a necessary expense, so people may curtail their spending on other, nonessential goods and services in order to maintain their eating habits.
---
* LIESL GOECKER can be contacted at 801-257-8605. DAWN HOUSE contributed to this story.
* ENERGY: The food industry is very energy-intensive. Food production, processing and distribution account for an estimated 20 percent of all U.S. energy use. As energy prices continue to rise so, too, will food prices.
* ETHANOL: Rising gas prices mean there is more demand for alternative fuel, such as ethanol. Ethanol is made from food stuffs, normally corn. This increased demand for corn, a staple ingredient in many foods and in many animal diets, drives up the price of the crop and consequently drives up the price of the product.
* WEATHER: The amount of food produced in the U.S. depends largely on weather conditions. When crops suffer because of unexpected freezes (such as in California earlier this year), droughts or floods, there is less to go around. So, prices increase.