BARRE – Pat Lesure’s flu is getting expensive.

The Barre woman has been splurging on fresh fruits and vegetables to help fight the bug. But with food prices rising at a fast clip lately, her new diet has forced some budgetary cutbacks elsewhere.

“I’m feeling the pinch for sure,” Lesure said as she unloaded a cartful of groceries outside the Price Chopper in Berlin Friday morning. “I’m just a single person on my own, with a car payment and insurance and everything else. It’s getting really rough.”
In 2007, the cost of food rose by 4 percent – the largest single leap in almost two decades, according to the U.S. Bureau of Labor Statistics, compared to 2.4 percent increases in both 2005 and 2006.

Certain food staples are on an even steeper ascent. The price of bread, for instance, is up by about 30 percent since February 2006, according to the Bureau of Labor Statistics Consumer Price Index. According to the bureau, a dozen eggs is up 84 cents, to $2.17 on average nationwide. And the orange juice Lesure has been drinking so much of costs a national average of $2.53 for 12 ounces of frozen concentrate, up from less than $1.90 two years ago.

“I shop around. I look for deals,” says Lesure, an employee of the State of Vermont. “But it’s a struggle now. It really is.”

The situation isn’t likely to get better anytime soon. Preliminary forecasts by the USDA predict another 4 percent hike in the cost of food in 2008.

“This is the largest increase in recent memory,” says Ephraim Leibtag, an economist with the Economic Research Division of the U.S. Department of Agriculture. “Since the 1990s food prices and inflation have been so stable, and that’s why this increase is getting so much attention now.”

Producers and purveyors of food in Vermont are at least as riled by rising costs as the customers purchasing their wares.

Paul Manghi, owner of Manghi’s Bread in Montpelier, supplies central Vermont grocery aisles with about 2,500 loaves weekly. The rising costs of ingredients, Manghi says, have forced his small business to raise its wholesale prices by 11 percent.

“Things like sunflower oil and spelt flour have gone up in the range of 50 percent,” Manghi says. “And wheat flour has gone up more than 200 percent.”

Manghi says he can’t alter the ingredients he’s been using in the 26 years since he opened the School Street bakery. So to accommodate rising expenses, he’s raised his prices.

“We just make what we make, and any cost increase we experience we just have to pass on to the customer,” Manghi says. “We don’t know yet how people will react to this, but so far we haven’t seen any negative impacts.”

At King Arthur Flour, headquartered in Norwich, the cost of doing business has risen even more precipitously. Allison Furbish, media relations coordinator for 218-year-old company, says wheat flour costs have risen three-fold in the last year.
By April, according to Furbish, a 5-pound bag of all-purpose flour will cost $4.99. Last year, the same product cost $2.89.

The business has posted a prominent notice on their Web site explaining the situation to customers.

“People are going to notice price increases, and we feel it’s important for them to understand why,” Furbish says.

Agricultural economist Leibtag says there are a number of factors behind the increases. Foremost, he says, is the cost of raw ingredients.

“Those raw ingredients that go into the food we eat – meat, soybeans, corn – have been going up at the commodity level,” Leibtag says. “That has all started to pass through the system.”

Furbish blames the monumental increase in the price of wheat to increased exports, higher fuel costs and a bio-fuel industry that has inflated the price of corn – thus compelling wheat farmers to switch crops.

“Gas prices drive up not only the cost of transportation but also production expenses on the farms themselves,” Furbush says. “And the ethanol push has made many farmers switch from growing wheat to corn, which reduces the supply of wheat available to us.”

At Maple Meadow Farm, an egg farm in Salisbury, co-owner Jackie Devoid says feed and grain prices have helped push up the cost of her product. In October 2006, she says, the farm paid $156 per ton for grain. A year later, the price was $256, and she expects that figure to rise again this fall. It all adds up quick at Maple Meadow, which houses 65,000 laying hens.

“Corn and soybean prices are just rocketing because of ethanol,” Devoid says. “And gasoline prices, as we all know, have led to huge increases. I was paying 7 cents for a carton a year and a half ago, and now it’s 12 cents a carton.”

Devoid says consumers shouldn’t take higher prices to mean a windfall for food producers like herself. Higher retail costs, she says, don’t mean big profits for her.
“You throw in increases in workers’ compensation, insurance and other miscellaneous things, and it’s almost a no-win situation,” Devoid says. “We’re making ends meet, but just barely.”

Leibtag says higher food prices will inevitably shift consumers’ spending habits.
“The first thing consumers do in situations like this is cut back on non-necessities,” he says. “They’re trying to find lower-cost alternatives.”

Among the most marked behavioral changes, according to Leibtag, is spending less at restaurants and more at the grocery store. A spokesperson at the Vermont Hospitality Council says the trade group has yet to notice any measurable trends in eating-out habits among Vermonters. Richard Fink, owner of Ariel’s Riverside in Montpelier, says he’s already feeling the pressure of rising ingredient costs. But it’s too early, he says, to determine whether higher food prices will keep patrons out of area dining establishments.

“You hear about it from customers all the time at the table – people are more concerned about prices than they have been in the past,” Fink says. “What remains to be seen is what happens in the next three to four months. Everybody’s a little bit worried about jobs and the economy. … And when everybody gets nervous, they stop spending money.”

John Mayfield, a 35-year veteran of the Vermont restaurant industry, says he’s adapting to higher food costs by evolving the menu at his Sean and Nora’s Restaurant on Main Street in Barre.

“Going out to eat is discretionary dollars, and I think that anytime prices go up, people consider not spending money on things they don’t have to,” Mayfield says. “Pasta prices have gone up dramatically in the past year, corn prices … and we’re seeing that in our kitchen.”

Mayfield said “white tablecloth” restaurants tend to take harder hits in economic downturns than the more economical diner-type establishments. To that end, he’s begun offering a $12.95 fixed price meal that includes an appetizer, entrée and dessert. Customers won’t see huge portions, but they’ll get enough to fill them up without breaking the bank.

“You start to change up your menu, find new dishes you can make that still offer a good value,” Mayfield says.

Customers have started taking a closer look at prices in grocery stores as well. State worker Pat Lesure says she looks for off-brand products, a trend that Shaw’s Supermarkets has noticed.

“Some of the typical behaviors we see when customers are feeling pinched would be increased coupon-usage, looking for greater value products and buying ‘own-brand’ products,” says Judy Chong, a spokeswoman for Shaw’s.

Chong says everything from weather patterns in Central America to rising transportation costs are behind the retail mark-ups.

Since last year, eggs have gone up about a dollar more a dozen from $1.49 to $2.49; generic store label white bread has risen 40 cents a loaf; and a gallon of 2 percent milk from Booth Brothers has gone up from $2.99 to $3.99 at Hall’s Market in Hardwick, according to Mike Hall, the assistant manager. At the Montpelier Shaw’s a gallon of 2 percent milk is $5, according to a store representative.

Hall said his independent, family run grocery store has no choice but to pass wholesale cost increases onto consumers.

“Everything across the board is going up 10 to 15 cents a week,” Hall said. “Since the first of the year, everything’s going up.”

At the Berlin Price Chopper Friday, the impact of those factors was in full view. A loaf of Wonder Bread, the staple of cheap lunch sandwiches, cost $2.79 for a 20-ounce loaf. Brand-name eggs were $2.99 a dozen. And a gallon of Booth Brothers milk was going for $4.39 a gallon.

William Prunier, the owner of Prunier’s Market in Castleton, says he hasn’t tracked specific prices, but he says “things are constantly going up.”

Feeding a family has gotten so expensive, according to the head of the Vermont Food Bank, that even middle-class families have begun seeking assistance from their local food shelves.

“We are serving one in 10 Vermonters, or 66,000 people annually, through a network of 270 food shelves and pantries around the state,” says Doug O’Brien, chief executive officer of the Vermont Food Bank. “… And it’s not just the poor or unemployed. These are working families. The overall cost of living is making it difficult for them to get through that week or month.”

Leibtag says the full effect of rising commodity and fuel prices has yet to fully impact retail prices. Until then, Vermonters can brace for the next round of price increases at their local grocery store.