Brace yourselves for the "food inflation" acceleration

By Layron Livingston - bio | email

TYLER, TEXAS (KLTV) - The Department of Agriculture projects the price of meat, poultry and fish to increase 2.5 to 3.5 percent in 2011.

Dairy products are expected to increase 4.5 to 5 percent.

"A lot of people are buying just the necessities--stuff that they have to have," said Adam Selman.

Selman manages Sav-Mor Foods, his family's grocery store in Frankston. He said that frugal shopping trend may continue for a while, so Sav-Mor is making adjustments, "We may not have as big a selection [of food] as some places, but we try to be as competitive as we can."

Unfortunately, Selman said, increasing store costs are occasionally passed onto the customer.

Selman said the store is already adjusting its food orders. "Cutting back on some of the stuff, and getting more of the necessities people want," he said.

Blame the cost of the commodities--the stuff that goes into your food--particularly, corn.  The price of corn is up nearly 50 percent since last summer.

"Anything that has corn in it, or eats corn, to dairy products--cheese goes up when corn goes up," said Robert Owens with Traditions Restaurant in Tyler.

Increasing commodity prices have already prompted McDonald's to raise it's menu prices.

Owens said the last time Traditions upped the prices on its menus was back in 2008. Around the same time, increased ethanol demand increased the price of corn.

"When that ticket price changes, [customers] notice," he said.

The USDA expects "food inflation" to pick up as the year closes.

The reason customers are not seeing those prices, now, is because the price of corn and other commodities hasn't yet been factored into retail prices.

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