Rising Food Prices Have Consumers, Businesses On Edge

Due to higher energy prices and the cost to get goods to market, food prices are bilking the already stretched budgets of local residents and businesses.

Irene Lucier, a senior citizen of Shelby Township, called food prices “horrible” while exiting the on Hall Road in Utica with a shopping cart not even half full.

Food prices are forecasted to rise more than three percent this year, according to the U.S. Department of Agriculture–that’s nearly twice as much as the overall inflation rate of 1.6 percent.

“They cut this. They cut that,” Lucier said of food portion sizes, adding, “But they raise food prices. You hear these people say they will have to eat dog food, and soon I’ll believe them. I hope I don’t get to that point.”

According to the 2010 annual report from Gleaners Community Food Bank of Southeastern Michigan, 65 percent more meals were provided to Macomb County residents than in 2009–the highest increase of any county in Southeastern Michigan.

Gleaners, which has 33 partner agencies in Macomb County, is servicing more people, and it is also being impacted as a purchaser and collector of food, said President W. DeWayne Wells. In addition to growing its own food, Gleaners is boosting its nutrition education efforts.

“We teach food management–process versus prepared foods. Any food that has process added to it has cost attached to it,” Wells said. “We are trying to help people maximize their available food resources.”

Food retailers say they are doing their part to help consumers save, too.

Two popular savings programs right now at Meijer are its credit cards, which provide regular in-store savings, as well as five cents off every gallon of gas purchased at a Meijer gas station; and mPerks, a text-enabled mobile phone coupon program.

“It’s no secret that customers are going to shop where they get the best value,” said Frank Guglielmi, spokesman for the Grand Rapids-based retailer.

Sonny Randazzo, owner and operator of Randazzo Fresh Market, which has three locations in Macomb County, said he price matches all non-chain store competitors in the county, in addition to offering personalized customer service and “unparalleled freshness and quality.” Produce is picked up daily from the Detroit Produce Terminal, he said.

Still, deals and food quality are only helping so much.

Food prices will continue to increase as long as crude oil prices stay high, the global population keeps growing and food is used for other purposes, said Prof. Anandi Sahu, who chairs Oakland University’ economics department.

“Corn and soybeans now being used for food and energy,” Sahu said. “Demand is growing faster than supply.”

And, when there is less to go around, shoppers get hit in the stores, and local food establishments are forced to “eat” costs associated with more expensive ingredients.

Michael Ceglarek and Teb Barbu, owners and operators of in Shelby Township, said since opening the location off Hayes Road in October, business has been negatively impacted by 10 percent.

“You’re almost afraid to raise prices, because you have to be competitive,” Ceglarek said.

Added Barbu: “Customers are aware, but they still want a good, cheap product. It’s like having a job, but you are volunteering the work.”

Barbu said Ceglarek said they are paying nearly double per pound than what they were a year ago for key ingredients, such as tomatoes, flour, cheese, green peppers and lettuce.

Sahu said that he doesn’t expect rising food prices to impact the U.S. population as much as they are affecting the populations of India and China, where food inflation is much higher right now.

“For a short while we could be in for a bumpy ride, but one way or another is things will ease out. Prices just may not go back to where they were,” he said.

But Randazzo said the way fuel costs are headed consumers likely won’t see any relief at the pump or checkout line with the approaching summer season.

“It all has to do with fuel and feed, what they have to feed the animals. All these factors come into play to raise prices of food for ‘Joe Consumer,’” he said.