Pat McGuire, interim provost and professor of economics, was recently quoted in an article in the Messenger Post about the impact of rising fuel costs on food prices.
The article notes McGuire “said while economic factors now are a bit different than the 1970s, based on changes in industry and technology, the result for many people is the same. Financially, many ‘don’t have anywhere to turn,’ he said. ‘It’s double whammy for those without jobs or enough income.'”
The full article follows.
High food, gas prices make for sour mix
Julie Sherwood • staff writer • May 8, 2011
Katrina Peck of Canandaigua remembers – not too long ago – paying $12 for a family-pack size of ground beef. Now it’s closer to $20.
It’s not just meat, either. Other foods her family of four depends on, such as eggs, milk and vegetables, have also skyrocketed, right along with gas prices – a mix lethal to the wallet. “It makes it tough,” said Peck, mother of Carter, 4 and Dylan, 2.
Peck and Courtney Lloyd of Canandaigua, mother of 1-year-old Braelyn, said they both shop around for the best prices but it is becoming harder to balance the books.
Don’t expect relief anytime soon, say experts.
“The federal government is predicting that average food prices will increase up to 3 percent this year, but the cost of some food already has begun moving much higher,” said Kate McKenna, communications manager for Tops Markets – increased costs borne of worldwide increases in the cost of fuel as well as many commodities.
As with other grocery chains – including Wegmans, which promised to hold the line on dozens of products through the end of the year – Tops is trying methods to attract and keep customers through the price surge.
“We have been successful in delaying some cost increases, reducing the increases and working with our suppliers to create more than 6,000 BonusCard specials in-store each week for our shoppers,” said McKenna.
But businesses, too, continue to feel the pinch.
At Pudgie’s Pizza Pasta & Subs on North Main Street in Canandaigua, manager Chaz Bocanelli said the cost of a case of tomatoes rose from $20 to $50. Costs of produce and other products used in making pizza and subs have jumped sky high, he said.
“Fuel prices are affecting everything,” he said. So far, Pudgies hasn’t raised its prices because of it, he said. But the family business, owned by his dad, Dominic Bocanelli, is putting out new menus and was conservative in how many to print. It may be just a matter of time before Pudgie’s is forced to raise costs on certain items to meet its expenses – but it’s not something the Bocanellis look forward to, Chaz said. The cost of printing menus, changing advertising fliers and redoing menu boards can also be costly.
Food and gas prices on the rise, coupled with an economic recovery that’s sluggish at best, make for a bad mix, experts say.
“It’s the worst economic condition this country can face,” said economic strategist Ed Butowsky. “High unemployment and high inflation at the same time is horrifying. I loved the ’70s, but the only thing scarier than all the plaid polyester we used to wear is the memory of our country mired in stagflation.”
Pat McGuire, professor of economics at Hobart and William Smith Colleges, said while economic factors now are a bit different than the 1970s, based on changes in industry and technology, the result for many people is the same. Financially, many “don’t have anywhere to turn,” he said. “It’s double whammy for those without jobs or enough income.”
Recently, a Reuters/University of Michigan consumer sentiment survey asked respondents for their expectations for future inflation, and consumers said they are expecting a hefty hike in prices. For the next year, expectations indicate a 4.6 percent rise, and the five-year expectations are at 3.2 percent. That is much higher than the almost nonexistent inflation people got used to during the last few years.
The Consumer Price Index rose 0.5 percent in March because of higher food and gas prices. According to the U.S. Department of Agriculture, many foods have almost doubled in price since March 2010.
Amanda Bogan of Geneva, a mother of two who is expecting a third child, said filling up her vehicle now costs about $80. As for food prices, she does her best to use coupons and buy generic brands, she said.
“Even with coupons, it’s costly,” she said.
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