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Gas Not Alone -- Food Prices Way Up, Too
Experts Tell What's Behind The Rise And How To Keep Impact Down

March 12, 2008

Why Food Prices Are Soaring

A gallon of milk costs more than a gallon of gas. This has to do with oil 
prices, biofuel production, and other global factors. Hattie Kauffman 
reports. | Share/Embed
PlayVideo
    * A gallon of milk costs more than a gallon of gas. This has to do with 
oil prices, biofuel production, and other global factors. Hattie Kauffman 
reports.
      Why Food Prices Are Soaring 
(2:32)http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3928591n
    * Stew Leonard Jr., President and CEO of Stew Leonard\'s grocery chain, 
tells Harry Smith that eating at home and buying local are good ways to keep 
your grocery bills down.
      Keep Grocery Prices Down (2:17)
http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3928929n

(CBS) It's not just gas whose rising price is putting the squeeze on our 
pocketbooks.

Food prices have been steadily increasing, as well.

And, says Stew Leonard Jr., president and CEO of the Stew Leonard grocery 
chain, it's those higher fuel prices that are "at the root" of steeper 
grocery bills.

He told Early Show co-anchor Harry Smith the tuna fisherman his chain uses 
tells Leonard it used to cost him $250 a day to go out on his boat, to put 
fuel in his boat, and now it's $1,000 a day. That cost has to be passed on."

Early Show national correspondent Hattie Kauffman points out that, "If it 
costs truckers more to fill their gas tanks, it'll cost more to ship produce 
around the country."

Other factors behind food taking a bigger bite out of consumer pocketbooks, 
Kauffman reports, include the falling dollar boosting prices of imported 
foods such as pasta, and large amounts of grain going to ethanol production 
and to other nations, cutting supplies here.

Some bakeries are struggling just to break even, Kauffman notes.

"The price of flour today is about four times the amount of price that it was 
in August, and it's going up on a weekly basis," says >Moshe Hecht, co-owner 
of the Schwartz Bakery and Cafe in Los Angeles. "But it's not only flour that 
it's affecting. It's also affecting eggs, oil, and everything that goes along 
with it" in producing baked goods.

Kauffman notes that gas only takes up about four percent of the average 
family's budget, while food accounts for roughly 13 percent.

Milk prices have shot up almost 18 percent in the last year, says the U.S. 
Department of Agriculture, and eggs are nearly 35 percent.

And a gallon of milk costs less than a gallon of gas.

Still, observes Leonard, "There hasn't been an explosion (in food prices). 
It's not like anything for people to panic about.

"Our milk right now is $1.89 a half-gallon. ... You were talking about it 
being ($3.50) a gallon, so you can get some good deals out there.

"I think the thing that people want to do right now is eat home more. You 
know, eating out is expensive, and if you can cook and prepare your food at 
home and with fresh local ingredients, it's really important."

Locally-grown ingredients don't cost nearly as much to ship as ones that have 
to come from far away, he explained.

And eating, say, meatloaf instead of more expensive cuts of meat can also 
help, Leonard said.