Food prices remain high

Friday, November 7th 2008, 9:09 pm
By: News 9

By Jennifer Pierce, NEWS 9

OKLAHOM CITY - Fuel prices may be dropping, but it's not making a dent in our grocery bills. A gallon of milk still costs more than it did a year ago.

Grocery industry officials say don't expect to see a big change in prices at your local grocery store anytime soon.

When gas prices went up, so did food prices and shoppers had to adjust their budgets. But now that prices at the pump are falling, shoppers like Tara Lawson don't understand why they're still paying more to feed their families.

"Everybody just assumed they were interrelated, but now that the gas price is $1.81 around the corner, and milk is still $4 a gallon, I don't know what's going on," Lawson said.

Dale Brooks, a forty-year veteran of the grocery industry, said fuel and food are related. As fuel prices skyrocketed there was a jump in the cost of corn, soybean and wheat, and the big food manufacturers bought their fuel 6-months-ago when diesel was over $4.60 per gallon.

"Their cost has gone up, and it will take about a year, year and a half for them to get back to normal," Brooks said.

In economics, it's known as sticky wages and prices.

"Usually prices increase faster than they come back down because companies get used to paying a certain wage to people, companies get used to charging a certain price for their product," Economics professor Steve Agee said.

Agee predicts food prices will drop in a few months, rather than a year, but given the up and downs of the current economy, many shoppers remain skeptical.

"I don't expect any changes immediately," Lawson said. "It's food. You have to eat, so you have to pay whatever they're asking for it."

Click here for tips on how to stretch your grocery budget.