KCCI.com
05-18-07
Consumers Socked With High Fuel, Grocery Prices
Expert Says Gas Prices Should Drop Next Month
DES MOINES, Iowa -- Fuel prices are setting another record Thursday.
Prices at some gas stations in Des Moines were $3.19 a gallon. That's higher
than the nationwide average of $3.11 a gallon.
The hike comes more than a week before the busy Memorial Day travel
weekend.
Gas isn't the only consumable that is more expensive these days.
The rising price of gas is beginning to affect other products such as food.
The double whammy is putting even more of a strain on household budgets.
"I don't think there's much you can do. I mean, you have to drive, you have to
eat, so it's not an option. I think it's ridiculous," said Sara Butters of Des Moines.
Butters is preparing for graduation parties. She's hosting her own and she will be
buying a lot of meat for family and friends. The price of her party just went up.
She said her grocery bill went up an extra $20 a week.
The price of ground beef is up almost 3 percent over last year. Milk prices are up
more than 3 percent, and the price of chicken surged 5.5 percent.
Meat is at a premium these days.
"It's energy -- not just to produce the product, but also the energy costs of
delivering it to the factory, from the factory to the wholesaler, from the wholesaler
to the store (and then) the store to the house," said David Swenson, associate
scientist of economics at Iowa State University.
He said the energy crisis is hitting Iowans especially hard.
The demand for alternative energy has also made the price of corn jump $1.50 in
the last year.
Higher corn prices are also making it more expensive to feed the Iowa farm
animals such as pigs and cows that wind up on the grocery's meat shelves.
"We have to pay for the disease, which is the higher energy prices and in our
current situation, we also have to pay for the cost of the cure, which is the higher
food prices," Swenson said.
Swenson said the news is not all bad.
He said U.S. energy companies will begin to refine more oil next month and that
prices should fall at gas stations and at grocery stores.