Prices for groceries expected to climb again this year

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buy this photo TOM STROMME/TribuneMaren Arbach, right, had a number of helpers while grocery shopping at Dan's Supermarket in Arrowhead Plaza in Bismarck on 12-31 afternoon. Upon hearing the USDA Consumer Price Index forecast that food prices would not rise as much as in 2008 Arbach said, "good, we have growing boys and they eat a lot." Shopping with Arbach are clockwise from lower front, Zachary Arbach, 5, Annah Belisle, 12, Austin Belisle, 8, and Benjamin Arbach, 9.

The drive to the grocery store is costing less, as is the fuel to get products from farm to supermarket shelf. But so far, savings at the checkout lane aren't showing up.

Shoppers - who might have splurged for Christmas prime rib and New Year's Eve crab legs - will have to hang tight a while longer.

According to the USDA's Consumer Price Index forecast, the only relief for the new year is that food costs aren't expected to go up as much as last year's 6 percent. Between 2008 and 2009, though, groceries are expected to cost as much as 11 percent more overall.

That hurts, no matter how it's sliced or diced.

Ralph Dockter, a vice president for six Dan's Supermarket stores, said some - not all - fuel surcharges are going away.

The USDA does predict that consumer prices for meat, eggs and dairy will see modest declines in 2009, though all other items will see a general increase of between 2 percent and 5 percent.

Some freight haulers surcharged more than others to make up for high gas and diesel costs and there are too many differentials and trigger points to estimate any general savings to the store chain, he said.

Whether that's translating into lower prices for shoppers, "I wouldn't say that," he said. "So much of that is based on the commodity market, and that can be slow to react."

Spring wheat is selling for about $6.50 a bushel today, between a half and third of last year's high prices. Corn is sharply down, too.

Shoppers are reacting because they have to.

Ann Babb of Stanton always watched sales, and now she watches them like a hawk.

She doesn't buy much that isn't on sale - calling her daughter in Bismarck to pick up cases of canned soups, for example. She's quit buying some items altogether, because even sale prices don't go low enough, and started buying others like butter, because it's remained more price stable that margarine.

Babb runs a small day care operation out of her home and has turned a basement bedroom over to storage, with freezers, extra refrigerators and shelving, so she has room to stock up.

She'll sit down in January, tally her year's receipts and then see how much more food cost for her family and daycare kids than it did the year before.

One thing she knows for sure. "It could be a lot worse," she said.

Babb buys the bulk of her groceries at Krause's Super Valu in Hazen, where she can get sale bargains also.

Krause's co-owner D. Krause said he thinks certain items - flour, as an example - will "have to go down" once lower raw commodity and fuel prices start to kick in more noticeably.

Milk at nearly $4 a gallon, bread rising toward $3 a loaf, eggs at $1.75 a dozen and burger at $3.80 a pound are not prices anyone enjoys.

Krause said he knows many consumers are having a hard time. "We're as frustrated as they are about the high prices," he said.

While Supervalu is the leading food retailer in the upper Midwest, stores generally have many of the same name brand products and essentially the same prices.

Krause said he's optimistic that a "brighter road" lies ahead.

Mary Ann Klein of rural Hazen prepares food for a family of eight.

She said the family's food budget is kept in check by the fact that they raise their own meat, milk their own cow, raise and freeze vegetables, and she bakes bread and other flour products.

The cost of her favorite flour increased from $12 to $32 for a 50-pound bag, but substitute brands weren't the same quality, she said.

Klein said she notices the higher cost of groceries, but since so much of their food comes from home, it isn't overwhelming.

"It is a little more exciting to figure out what we can do," she said.

Urban dwellers don't have Klein's options.

Cassie Dumond, owner of a cafe by that name in Stanton, said she passed along about an 8 percent food cost increase to her customers this year, even though she's still selling a burger and fries for $5.50.

Dumond said some food freight haulers recently started to remove fuel surcharges, which were assessed either per trip, or embedded in the price of their product.

Still, she doesn't see her menu prices dropping. Pepsi will cost more starting in January, and other costs are fixed or rising.

Like all folks dealing with high food costs, whether for home or business, she can only do so much, starting with paying attention to what she spends.

"I try to be on top of what I pay for everything,' she said.

(Reach reporter Lauren Donovan at 888-303-5511 or lauren@westriv.com.)

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