GLOBAL FOOD CRISIS
Clipping, Scrimping, Saving
Egg prices are up 35 percent, with milk and bread not far behind. Consumers are scrambling to find ways to cope.
Thursday, May 1, 2008; Page A01
The last thing Marti Tracy wants to do on a Saturday is clip coupons. But last month the 34-year-old Bowie resident felt she no longer had a choice. She'd already given up organic meat and decided to buy organic milk only for her 2-year-old son, not for the whole family.
Tracy and her partner also stopped buying the cereals they like in favor of whatever was on sale; stopped picking up convenient single-size packs of juice, water or crackers; and, in order to save gas, stopped going to multiple stores. "I find the whole thing a huge hassle, but I've reached a tipping point," said Tracy, a government human resources specialist who is pregnant with her second child. "Clearly, I'm not unable to feed my family. But I just can't feed my family the way I'd like to feed them."
Since March 2007, according to the Bureau of Labor Statistics, the price of eggs has jumped 35 percent. A gallon of milk is up 23 percent. A loaf of white bread has climbed 16 percent. And a pound of ground chuck is up 8 percent. Overall, U.S. food prices in 2008 are expected to rise 4 to 5 percent, about double the increases of recent years. And while the total rise is far less drastic than elsewhere around the world, the sharp hike for staples means everyone is feeling the pinch.
"We are in shocking new territory," said Todd Hale, senior vice president of consumer shopping and insights at Nielsen Consumer Panel Services. "With the exception of the very affluent, everyone is looking to save by altering where they shop, how they shop and the brands they buy."
Take the uptick in coupon clipping. According to NCH Marketing Services, a coupon clearinghouse in Chicago, the number of grocery coupons redeemed in 2007 increased by 100 million, or 6 percent, to 1.8 billion. The rise reversed a seven-year decline. "Every year, manufacturers have made coupons more difficult to redeem by shortening the expiration date and increasing the purchase requirements. And every year, people redeemed them less," said Charlie Brown, NCH's vice president of marketing. "This tells me that consumers are now more determined to save money."
The crunch for American shoppers pales compared with the challenges faced by those in the developing world. Americans spend just 9.9 percent of household income on food, according to the Agriculture Department. Compare that with poor countries such as Ethiopia and Bangladesh, where it's not uncommon for families to spend 70 percent. Diets also are more varied here: If the price of milk or flour jumps, shoppers can opt for other items. A typical poor family in Bangladesh, said John Hoddinott, a senior research fellow at the International Food Policy Research Institute, gets 70 to 80 percent of its calories from basic staples, commodities whose prices have risen fastest.
"Internationally, it's appropriate to say the sky is falling," said Ephraim Leibtag, an economist with the Agriculture Department's Economic Research Service. "The average household is affected here, but it's not a dire situation."
Still, the timing has spooked shoppers. The bad news about the mortgage crisis has helped sink consumer confidence to a five-year low. The average price of a gallon of gas reached $3.60 this week.
The drumbeat of ominous headlines is also alarming. U.N. Secretary General Ban Ki-moon said in Geneva on Tuesday that he would set up a task force to tackle rising food prices in an attempt to avert "social unrest on an unprecedented scale." President Bush has freed up $240 million in food aid to meet emergency needs around the world, bringing the total U.S. contribution since October to $1.36 billion. Members of Congress and even Secretary of State Condoleezza Rice are starting to question whether ethanol mandates, which have been linked to rising prices, are the best answer to America's reliance on imported oil. Today, Sen. Charles E. Schumer (D-N.Y.) will hold the first congressional hearing on how skyrocketing food prices are affecting American families.
"You used to hear people talking about increases on specific items; now it's much more broad," Schumer said. "When you go down the street now, you hear people complaining about food prices almost as much as gas prices."
The price hikes have hit home for Nicole Gindraw-Parrott, a 29-year-old trainer at an Atlanta gas utility and a mother of two. Since January, she said, she's been transformed into a "coupon-clipping, price-matching monster."
Gindraw-Parrott no longer buys brand-name products unless she's at a warehouse store like Sam's Club or BJ's Wholesale Club. She's even begun sending herself reminders on her BlackBerry so she doesn't forget a case of water on sale at CVS or the twice-monthly sale on milk at Kroger: On Saturday nights, after the kids are in bed, she sometimes hits the grocery store to pick up a gallon of milk before the sale ends at midnight. If she buys at the last minute, the milk will last through the next week. Sometimes she freezes it.