Prices for Milk, Beef, Sugar on the Rise

Chatsworth shoppers can expect to pay more for groceries in the coming months as experts forecast a nationwide increase in food prices.

The Consumer Price Index predicted food prices to rise an average of 2 to 3 percent for 2011. The increase goes along with overall food prices, which are up by 1.5 percent across the board right now, according to the U.S. Department of Agriculture. That increase is higher than the rate of inflation and it is expected to continue next year.           

The value of food and basic ingredients are affected by several factors including the rising cost of energy, combined agricultural woes at home and abroad, and the growing demand for wheat, corn, meat and other commodities.

"There was a pretty good upswing in 2008 from the same phenomenon. I think it's going to be noticeable, but most people will be able to manage unless they're already on a very tight budget," said Dr. Nancy Sidhu, Chief Economist for the L.A. County Economic Development Corporation.

She said the increase could last about a year, but consumers have yet to bear the brunt. "It will be a matter of weeks or months depending on the products," Sidhu said.

Encino resident Erica Jabaherian said the projected hikes would affect her shopping, as she tries to budget for groceries. The Pierce College student's weekly groceries at Ralphs include several eighty-eight cent Budget Gourmet frozen dinners and a two for $5 deal on generic Kroger's Deluxe ice cream. She says her strategy to avoid the up and coming higher prices is to shop at discount grocery stores.

"[I'll] shop at a different place. The 99 cent store was there and I was loving it," Jabaherian says of the 99 Cent Only store that recently turned into a BevMo at 17965 Ventura Blvd.

Other Ralphs customers say they will just cope with the changes. Actor Senyo Amoaku recommends having a flexible appetite and taking advantage of rewards member discounts.

"I do notice a change on chicken and some of the meat products," Amoaku said. "As far as the bread and cereals, they seem to have one or two good sales on."

Because livestock feed on corn and wheat, their byproducts will similarly go up in price. According to a U.S. Bureau of Labor Statistics city average report, prices for fruits and vegetables are up 3 percent, eggs 7 percent, white sugar 9 percent, milk 10 percent and beef 13 percent.

Gelson's manager, Isaac Contreras, said his Encino store is trying to balance sales with inflation by utilizing store suppliers who buy locally to keep costs down. When asked how the typical Gelson's shopper would react to a marginal increase, Contreras said, "Even though they have money, that doesn't mean they don't look at prices."

"They see it, especially if it's a big difference," he added. "A few cents here and there they don't know, but anywhere from 50 cents to a dollar we usually get feedback about that."

Consumers will not be the only ones paying the price. Restaurants will also have to afford larger increases in wholesale values, much more compared to retail value. Even executives from McDonalds announced last month that customers will see a 2011 price hike.

Kraft Foods Inc., Sara Lee Corp. and General Mills Inc. have also said they'll raise prices on certain items. Starbucks said it would boost prices of larger and hard-to-make drinks. This month, cereal maker Kellogg hinted that it will be raising prices, without disclosing specifics.

Local grocery chain Gelson's and Kroger-owned Ralphs have said they'll pass supplier increases along to consumers.