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Updated: 8:44 PM Oct 20, 2008
Gas Prices Down, Why Not Food?
When food prices went up, companies were quick to blame oil. So why aren't prices dropping now that fuel prices are?
Posted: 6:37 PM Oct 20, 2008Reporter: Lauren Zakalik Email Address: lauren.zakalik@wilx.com |
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When oil and gas prices went up earlier this year, food prices were quick to follow.
Now, gas prices are down, and food prices-- just ask any shopper-- haven't really changed much at all.
"It used to be hitting $100 was a big deal-- now it's almost always $200, you definitely feel that!" says grocery shopper Lisa Granger.
"[Food] prices will not go down real rapidly," says MSU economist Eric Scorsone.
Talk about sour news; Scorsone says "sticky" prices are to blame.
"Stickiness refers to the fact that prices go up fast, and tend to go down slower," he says.
Scorsone says oil is just one of many factors, like labor costs and demand, that are keeping your food bill high.
With oil dropping, you may get a break on more raw items liike meat or produce (items where there's less of a pass-on between producer and consumer), but the food that'll continue to cost you?
"Processed, boxed, non-perishable items," Scorsone says, mentioning canned foods and cereals as examples.
While the prices in the aisles may not be dropping as quickly as gas and oil prices, Scorsone says there is a silver lining. For now, food prices might be as high as they're going to go.
"At least consumers can know prices won't go up the way they did. They may not go down, but they won't double," he says.
Shopper Gini Larson understands oil doesn't drive everything at the store-- but she'd like to see some stability.
"I don't mind paying my share," Larson says. "I just want to know what real share is compared to gas prices."
Scorsone says in order to see any sort of noticeable change in food prices, we'll have to first see at least three to six months of stability in the oil market.
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