Rising Food Prices Give Shoppers Indigestion

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Butcher reaching for chops, low angle view
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This is prime barbecue season, and most of the main ingredients for a backyard banquet are soaring in price. Beef, ribs and chicken -- as well as the lettuce, tomato and other secondary goodies that make the meal -- all cost a lot more than they did last summer. And don't forget dessert. Prices for that wonderful fruit salad and the Hershey (HSY) bars for s'mores are going up, too.

Blame Mother Nature for a lot of those price hikes. Droughts continue to worsen in many prime growing areas in the U.S. An unusual pig virus has pork prices sizzling, and of course, good old supply and demand is always a factor.

When you visit the grocery, you'll find the biggest price hikes along the periphery of the store -- the fruit and veggies along one of the far walls, dairy products at the other end and the meats along the back wall.

Statistics Back Up Rising Costs You've Been Seeing

The government reported Tuesday that the Consumer Price Index rose in June by 0.3 percent, and food costs edged up by just 0.1 percent, after a 0.5 percent increase in May. There's always the disclaimer that food and energy prices are volatile, and you shouldn't look at just one month's data. So we'll look at the longer trend.

While prices are spiking in some areas of the supermarket, the overall increases are in line with historical norms. The Agriculture Department expects food prices to increase in the 2½ percent to 3½ percent range this year, not far from the 20-year average of 2.8 percent per year.

But there are some trends down on the farm that make it tough for supermarket shoppers.

Smallest Number of Cattle Since '51

The first has to do with the extensive and long-lasting drought that has ravaged California and big sections of the Midwest. Farmers have had to significantly reduce the size of their herds as the drought raised the cost of animal feed and put severe stress on livestock. These problems are now in their third year, so herds are thinning out, and the impact is beginning to pile up.

The Agriculture Department says herd sizes are the smallest they've been since 1951. And because of the long incubation period for cattle and the time it takes to fatten them up, beef prices aren't likely to come down any time soon.

"It's too early to tell the extent of the problem or how long it will last," Agriculture Department economist Annemarie Kuhns said. "There's still too much uncertainty."

The Agriculture Department expects meat prices overall to increase by about 5½ percent this year. Beef and veal will be a little bit more than that, while pork will be a little bit less.

Droughts Wallop California, Southwest, Great Plains

Fresh fruits and eggs are also expected to increase in the 5 percent to 6 percent range. Fruits and veggies are mainly effected by the weather. The drought in California, the Southwest and the Great Plains is now in its third year, with no signs of letting up.

California growers account for about half of the nation's fruits and veggies, but water is so scarce that some farmers have decided not to plant all or part of their crops this year. In addition, Florida orange growers have suffered from a withering disease that has cut the size of this year's harvest -- and the size of the fruit itself.

Consumer experts say shoppers don't have as many options to substitute an alternative food (pork for beef, for example) for one that's rising in price. But there are some tactics to trim the grocery bill.

Maura White, a frugal living expert from Rochester, New York, suggests using cheaper cuts of meat and making friends with the store butcher. White, who runs the Happy Deal, Happy Day website, says smart shoppers should "ask the butcher about sale prices, usually mid-week or late in the day."

As for fruits and veggies, White urges consumers to take advantage of farmers' markets and locally grown produce. She's also a big advocate of coupons and shopper apps. Among her favorites, in addition to her own site, are: i-bought-it.com, checkout51.com and the price comparison app Favado.


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