Cost of groceries at 17-year high

March 28, 2008 6:12:21 PM PDT
The cost of food is rising and it's threatening to ignite inflation.

It's not your imagination. There is real price shock at the grocery store.

The Bureau of Labor Statistics says Bay Area food prices have risen five percent in the past year.

"For the west region, food prices went up in 2007 at the fastest rate in 17 years," says Amar Mann, the regional economist for the Bureau of Labor Statistics.

Mann says the bite at the checkout stand is more noticeable because of the foods that have shown the greatest increase.

In the Bay Area:

  • Milk is up 35 percent
  • Cheddar cheese is up 18 percent
  • Chicken breasts is up 16 percent
  • Bread is up 12 percent
  • Ice cream is up almost 10 percent

Nationally, eggs are up 24 percent.

Higher fuel prices make transporting food more expensive, so does the production of corn-based ethanol.

"As corn prices have gone up, farmers have adjusted their production... they're producing more corn and taking land out of wheat production, so in turn, that's affecting wheat prices," says Mann.

So the average price of a loaf of white bread has gone up from $1.29 to $1.44. Higher food prices can also be blamed on rising incomes around the world, such as in China and India.

This has led to more demand for wheat products and meat, such as chicken.

The one bright spot is produce. Fruit and vegetable prices have been flat to lower, which means a healthy diet costs less.