Sticker Shock

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Friday, October 22, 2010 - 9:59am

Wheat and corn shortages could trigger a spike in your grocery bill.

Commodities experts say the price you pay for a number of items at the grocery store is on the way up.

"There will be an increase," Steve Suppan warned.

Suppan is a commodities expert with the Minneapolis-based Institute for Agriculture and Trade Policy. H

e says a Russian grain shortage and a domestic corn crop that fell short are ultimately to blame.

"It was quite a bit less than the USDA outlook had predicted only three months ago," Suppan said of the corn crop. He's talking about national yields, not local ones.

So the price is passed on to the producers of corn and grain based foods.

It's also passed on to farmers who depend on those commodities for feed.

That means dairy and meat prices could also soar in the coming months.

"You'll notice it more in the dairy and meat market than you will in the processed food section," Suppan explained.

Sally Weissman, owner of Great Harvest Bread Co. in Minneapolis, is already dealing with price increases.

"What we purchase the most of is butter and cheese and it has just continually gone up since probably June," she said.

Weissman plans on paying more for wheat when she re-orders for next year as well.

While her staff produces 1,000 loaves of bread a day, she's shuffling her budget around, trying to keep costs away from the consumer.

"We try not to, but if continues, we'll have to, but we try not to," she explained.

General Mills is on record talking about an increase in the price of some cereals and baking goods; Kraft Foods is also expected to raise prices.

Suppan says their price increases won't be as noticeable as the ones in the dairy cases and meat aisle because the large corporations can spread the increased commodity costs around better.
 

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