What’s Behind Grocery Store Sticker Shock?

As people in Connecticut prepare for cookouts and barbecues this Labor Day weekend, experts are warning that rising food prices across a wide range of staples is causing many shoppers to do a double-take when checking their weekly grocery store receipts.

To help explain the market forces driving grocery bill sticker shock, UConn Today spoke with Adam N. Rabinowitz, assistant research professor in the Department of Agricultural and Resource Economics.

Rabinowitz is also a researcher in the Charles J. Zwick Center for Food and Resource Policy, who is internationally known for his economic research into problems confronting food systems, natural resources, food, and agricultural markets. His research projects focus on food marketing, food policy, and consumer behavior. He recently co-authored the “2012 Community Food Security in Connecticut” report, and other papers focused on local foods, the dairy sector, and industry and consumer behavior.

Q. As we enter this Labor Day weekend, experts are warning about new jumps in grocery prices. Are Connecticut shoppers in for sticker shock over food bills at their grocery stores?

A. Connecticut imports almost all of its food; it’s estimated that only about 3 percent of the food purchased in the state is locally grown. With 97 percent coming from outside, our residents are vulnerable to what happens in other areas. This is especially true for fresh foods like fruits, vegetables, eggs, and beef – foods that have seen price increases much larger than normal this year. Ongoing drought conditions in California, Texas, and Oklahoma may continue this upward trend. Even if weather conditions improve, however, the negative impact will linger – especially with beef, as it takes a long time to rebuild herds. Processed foods haven’t seen much of a price increase, and prices for corn and soybean have dropped significantly. However, this raises concerns about whether the relatively less expensive processed foods will begin to substitute the fresh foods that are increasing in price, which also leads to health concerns.

Q. Can you explain what factors are pushing up the price of food staples?

A. It’s been a combination of reduced supply from weather conditions in the south and west, as well as the general economy. As Connecticut relies on such a large percentage of imports, what happens in other parts of our country affects the prices we pay. One also needs to consider the general state of the economy, and the exchange rate with other countries that are exporting products to Connecticut.

Q. Connecticut’s urban poor have been feeling the sting of steadily growing grocery prices for a few years, but experts are now saying that more high-income households, defined as those earning more than $100,000 a year, report feeling pressure too. Is that so?

A. Two factors are in play here. Higher income households typically consume more of the fresh products that have seen such large increases in prices, i.e. fruit, vegetables, and beef. But the price of food is not something that affects only low-income households. As prices rise, more income must be spent to maintain current food consumption. While low-income households spend a far greater percentage of their income on food, research has found that households of all income levels can experience low levels of food security.

Q. Last year, UConn’s Zwick Center for Food and Resource Policy and Department of Cooperative Extension released a study that examined food security in all of Connecticut’s 169 towns, showing how well each town’s residents were being served through public food assistance programs. Is the number of households in Connecticut without enough money to buy food increasing?

A. It’s widely known that Connecticut has the highest per capita income in the United States. However, there are areas of the state where per capita income is towards the bottom in the U.S. The most recent data available continue to show an increase in Connecticut households that experience low levels of food security. Since 2000 there has been a steady increase, from 7.6 percent of households to 13.4 percent in 2012. The Zwick Center for Food and Resource Policy is currently planning the next Community Food Security report and additional research on household food security in Connecticut.