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more photosInformation based on Consumer Price Index, except for asterisked items, which are based on information from the American Farm Bureau.
Melissa Jansson / The Bulletin
A pricier picnic
If you think you're paying more for staples this year ... you're right
By Cindy Powers / The Bulletin
Published: July 04. 2008 4:00AM PSTIt’s no big surprise that the cost of those Fourth of July burgers and chips is up again this year.
Those in the know cite a number of reasons, including the increased costs of fertilizer and livestock feed, as well as higher fuel prices.
And national food cost averages show that Central Oregonians are feeling the squeeze of high prices more intensely than our fellow patriots.
An informal survey of local grocers by The Bulletin shows that prices across the board are higher than the most recent U.S. city average Consumer Price Index numbers for 2008.
Economists say just hauling the food over the mountains is enough to bump up local prices.
“Transportation has got to be the dominant distinction, because I don’t think you are hurting for a number of stores per capita, so it isn’t shortage,” said Tim Duy, the director of the Oregon Economic Forum at the University of Oregon.
Having vacationed in the Bend area recently himself, Duy said he noticed food prices seemed higher locally than in Eugene.
“Obviously, you’re not on a major highway, and so any sort of travel through Central Oregon is going to be a deviation away from main routes. So that is going to add expense,” he said.
The impact can be particularly notable for items like potato chips, whose bags contain air, taking up precious cargo space, Duy said.
Three supermarkets in Bend had prices well above the CPI average of $3.83 for a family-sized bag of potato chips, with the lowest local price at $4.37.
Refrigeration units for trucks that carry products like ice cream mean more fuel use as well.
While some beer is kept cool for the ride over the passes, most is not. Whether or not room-temperature travel is a reason, local brew fans may be happy to learn that the cost of a six-pack of beer in Bend is lower than the 2008 CPI average of $6.97, by more than $1.50.
Individual shopping choices also factor strongly into the total of an average grocery bill, said Brent Searle of the Oregon Department of Agriculture.
Searle has been with the department for 17 years and has spent his career studying factors that impact food prices.
He said the Consumer Price Index determines the average cost of items like brownies by looking at products ranging from Ding Dongs to that spendy organic brownie at a specialty store.
“On an individual level, people’s food baskets can be very different, so how an individual family’s food cost is impacted is based widely on what they choose,” Searle said.
He said the prices of foods like fruits and vegetables are on the rise, while a lot of what is considered “junk food” is decreasing.
“I don’t judge people’s preferences, but that is going to impact their budget, and some things in the food basket are getting cheaper,” he said.
But shoppers in Bend can still find deals. While the average prices of most items at the three stores visited here were higher than the CPI, sale prices were as low as 88 cents for a pound of hot dogs and 79 cents for 2 liters of soda.
In addition to fuel costs, Searle said the costs of livestock feed and farm fertilizer have gone up in recent years. He also cited increased labor costs as contributing to increases in food costs.
Research from the U.S. Department of Agriculture shows that nearly 40 percent of the cost of farm-related items went to pay for labor costs in 2006.
The research also showed that consumer preferences, like the ones cited by Duy and Searle, are driving up food costs.
“A changing work force — more women and more two-income households — means that busy consumers are demanding quick, easy-to-prepare convenience foods,” according to a 2006 report from the USDA’s Economic Research Service.
Those foods cost more at the retail level and have led to an increase in food spending since the 1980s, the report said.
And in Oregon, a higher cost of living means pricier food, said regional economist Steve Williams with the Oregon Employment Department.
Traditionally, regional food prices in the Northwest have increased at a slower rate than the rest of the nation, Williams said.
But last year, food costs went up by about 3.7 percent in the region, compared with an average 2.8 percent increase nationwide, Williams said.
The USDA has predicted that rate will go up again this year by about 5 percent, as retailers continue to pass on higher commodity and energy costs to consumers.
Cindy Powers can be reached at 541-617-7812 or cpowers@bendbulletin.com.
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