Food, gas prices soar in Sonoma County - 'You have to watch the sales'

As global food prices soar, shoppers already hit hard by the recession are carefully selecting what goes into their shopping cart.

That trend could impact Sonoma County food producers, who rely on customers who buy their locally produced organic foods.

Nationwide, the cost of foods consumed in households is projected to rise 2 percent to 3 percent this year, far surpassing the 0.8 percent increase of 2010, according to federal estimates.

As the checkout bill at the market rises, Sonoma County's 200 food producers could feel the impact, said Ben Stone, economic director of the Sonoma County Economic Development Board.

Artisanal food producers experience weaker sales as customers trade down to less-expensive options, he noted.

"There's a premium overlay to our products. We're not so much a commodities producer as we are a specialized niche producer," Stone said. "The challenge will be if you're a milk or cheese producer, to what extent your product is worth it to a customer who may want to trade down to a mass-produced product."

Some customers are already making those types of tradeoffs, like Marisa Lara of Santa Rosa, who shopped in Safeway on Wednesday. Lara said that nowadays she buys chicken and ground beef for her family, instead of the steaks they used to enjoy.

"I really look at prices more carefully," Lara said. "You have to watch the sales."

Lara said the price of a half gallon of milk at Safeway increased by 20 cents in the past week.

At Pacific Market, Burke Webb, a specialty buyer who focuses on natural and gourmet foods, said prices rose on about 30 of the store's gourmet products in the past few weeks, and have gone up even more in the store's mass-market products. But Webb said the food price increases were much worse during periods of high inflation in the 1970s, when he worked as a buyer for the store.

Webb expects shoppers to change their buying habits as prices continue to rise.

"They seem to trend down their shopping, and shop sometimes for a lesser-quality item and sacrifice that for price," Webb said. "A lot of companies right now have been absorbing some of the price increases. But they're to the point right now that they're going to have to make price increases or they won't be here any longer."

Stan Mead, chief executive officer of La Tortilla Factory, said his company has been absorbing price increases by working more efficiently.

The price of corn, a key ingredient in his products, has increased worldwide. Since corn is used in ethanol, its price increase has put pressure on the prices of all foods that are delivered using fuel.

"I think you're going to see just an overall increase in everything from cat food to filet mignon," Mead said.

Nationally, from December 2009 to December 2010, the price of butter rose 21.9 percent, egg and beef prices both rose 6.1 percent and milk prices rose 5.1 percent.

Robert Eyler, chairman of the economics department at Sonoma State University, said rising food prices will hit low-income families the hardest.

"People are potentially going to have to make choices between buying food and buying other things, because it's getting more expensive to eat," Eyler said.

All food prices are expected to rise this year. The World Food Bank recently issued a report stating that global food prices had risen 29 percent in the past year.

Economists attribute those increases to rising gas prices, global weather patterns and increased demand for Western food products in Asia.

Jennifer Bice, owner of Redwood Hill Farm & Creamery, said the cost of producing goat cheese, yogurts and other dairy products on her family farm has increased, due to climbing fuel and feed costs. But her company has held prices steady in the past few years and reduced costs by installing solar panels and more energy-efficient lighting.

Bice, whose sales grew during the recession, is not worried that she'll lose customers as the cost of a bag of groceries grows higher.

"People are realizing that if they're going to buy the cheapest product, then they're supporting, lots of times, factory farming," Bice said. "And there are a lot of people in our area that are willing to pay more to avoid that."

One of those shoppers is Joe Mathur, who bought a prepared rotisserie chicken at Pacific Market. Although she and her husband are on a fixed income and collecting Social Security, she still prefers to buy high quality meat and dairy.

"Everything has gone up," Mathur said. "Milk has gone up a little bit, but it's worth it."

News Researcher Teresa Meikle contributed to this report. You can reach Cathy Bussewitz at 521-5276 or cathy.bussewitz@pressdemocrat.com.