Sun Biz: Flour the new cookie monster October 19, 2008

Kelly Myers the manager of the Family Food Town store in Palisade stocks the flour in the store. The cost of flour is way up from last year.



The price of flour is startling area and nationwide grocers.

Year-to-date prices in the Western Region of the United States for food at home increased 7.3 percent, and prices for food away from home increased 3.9 percent, according to the Bureau of Labor Statistics.

One local grocer, meanwhile, estimates he has noticed basic grocery prices increase by 30 percent since January.

“There has been quite a bit of an increase over the last few months,” said Ephraim Leibtag, of the United States Department of Agriculture economic research service.

But the price hike grocers have found most shocking this year is for the ingredient soon to be in high demand for holiday cookies and other confections.

“Flour is probably the worst,” said Kelly Myers, owner of Family Food Town, 112 W. Third Ave. in Palisade, a locallyowned independent grocery store. “Flour’s gone crazy.”

Private label flour was at $6.99 for 25 pounds a year ago at this time, he said. That price is now $14.99.

While the Associated Press reported this week that world grain prices are tumbling, they note everyday consumers aren’t seeing it yet.

In fact, local shoppers are still in the thick of it.

Myers said anything made with grain has gone up because supply has diminished as more farmers have switched to planting corn to take advantage of corn prices, which are being bolstered by demand to use it in ethanol production.

“That takes it out of the food market,” Myers said. “Having a shorter supply makes it a higher price, because it reduces the supply for human consumption. That makes things like corn oil, vegetable oil, all that stuff, go up.”

One big-name grocery supplier attempted to make flour a part of a sale advertisement, then had to pull it because of flour being in such short supply, Myers said.

“There won’t be many women baking now,” said Barb Smith, co-owner of Desert Gateway Store, a convenience store at 1022 U.S. Highway 6&50 in Fruita. “They won’t be doing the Halloween and Thanksgiving and Christmas cookies if the flour’s gone up that high.”

Smith’s late mother left her mementos of the Great Depression — rationing stamps for sugar, coffee and gas — that were issued to rein in distribution of items that were in short supply.

“If there’s a flour shortage, then you’ll have to ration it,” Smith said. “I think we’re in for quite a ride.”

She said she’s seen items such as soda pop, candy bars, coffee, potato chips and chewing tobacco go through a round of price hikes in the past three months.

Officials with Albertsons and City Market stores didn’t give specific prices, but a spokeswoman for City Market acknowledged the flour price increase.

“There’s not just one thing that attributes to that price increase,” said Kelly McGannon, Denver-based spokeswoman for City Market stores. “Cost of transportation, for one. The cost of corn just went up.

Ethanol drove up the price of flour.”

Family Food Town officials noticed canned vegetables have been on the rise. They sell for about 50 percent more than they would have a year ago, Myers said.

He said he has noticed the increases in everything the past three months, including beef, chicken, pork, rice, everything he gets from Associated Food Stores.

Family Food Town’s prices are generally lower than some of the commercial chains because, Myers said, they don’t pay as much overhead and other expenses as other big name stores.

A pot roast, for example, is now on sale there for $2.99 a pound, where a local commercial grocer is running the same type of special this week at $3.99. A box of generic label hot chocolate that goes for at least $2.99 will usually be $1.99 at his store.

Smith predicts prices on groceries will worsen by the year’s end.

Why?

“Just from listening to my mom when she used to tell me about the recession and Depression,” Smith said.

“I see a lot of things that are the same. I remember her always telling me, ‘Thank God you don’t have to go through anything like that, cause it was just horrible.’ My mom is no longer with us, so she doesn’t have to watch this happening.”


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