If anybody knows about rising food costs it’s Clem Nilan. As General Manager of City Market Co-op in Burlington, Vt., he’s witnessed the market rate he pays to suppliers for items such as organic eggs and milk increase by double-digits. Some of the ups-and-downs this year can be attributed to global trends, while others were a result of Hurricane Irene, which devastated several New England farms that usually keep City Market stocked with local produce.
But it wasn’t until Nilan began placing orders for turkey in the run-up to Thanksgiving that he realized just how high prices had gotten. “Sometimes it’s just like price creep,” he says. “Then all of a sudden you look and say, ‘You know I had this on sale at Thanksgiving last year and now this is what I’m paying for wholesale.'"
Nilan isn’t the only natural food grocer feeling sticker shock. Sage Horner of Sunflower Farmers Markets says that sudden cost increases in produce posed a challenge for the supermarket chain in early 2011. And the cost of beef, chicken and pork continue to stay high. “It seems to me that we’ve been at almost historic highs in cost in the protein markets,” he says. “It’s the feed stocks, it’s the grain, it’s the fuel, the transportation, the cold storage expenses. All of those things have come along and exacerbated some of the cost dynamic there.”
Yet given the persistently dour U.S. economy and high unemployment, grocers—and conventional grocers, in particular—have been reluctant to pass these cost increases onto consumers. But, just in time for Thanksgiving, prices at checkout are going up nationally.
Natural retailers shield shoppers from higher prices
The cost for a traditional Thanksgiving dinner has increased about 13 percent this year, according to the American Farm Bureau Federation. The group’s annual survey of retail items including turkey, pumpkin pie, cranberries and stuffing, that the average cost to feed a family of 10 is $49.20. This a $5.73 increase from last year’s average of $43.47. Still, the cost of Thanksgiving dinner in the U.S., when adjusted for inflation, has remained relatively stable over the past two decades, note analysts.
But it may not feel that way to consumers who are struggling financially, especially when the U.S. Department of Agriculture says that food prices will have risen between 4 and 5 percent in 2011.
Nilan says he does his best at City Market to shield customers from the most dramatic jumps in food costs by offering alternative items and sales. “For the average person, unless the price increase is a shocker like with bananas or milk, it’s just like nickel here, a dime there that get you at the register.”