Consumer food, gas prices hit local economies

Union Democrat staff /

Rising consumer food and fuel prices are trickling down to local restaurants, some of which are increasing menu prices while others simply absorb the loss.

An early April survey of Central Valley and Bay Area consumers by SurveyUSA found more than half of the adults surveyed reported eating out less than normal. Between 48 and 75 percent of respondents also reported cutting back on household spending significantly because of higher gas prices.

California has some of the highest fuel prices in the country. An average gallon of gas costs $4.42 and diesel $4.44, and both had a more than $1 increase since April 18, 2010, the U.S. Energy Information Administration reports.

The average gas price in the U.S. is 3.84 and diesel is $4.10 per

gallon. Both increased $1 in the past year, the U.S. EIA reports.

The fuel oil index rose 6.2 percent in March and has increased 37.2

percent in the last six months, the Bureau of Labor Statistics Consumer

Price Index said.

This increase has caused food distributors to add a fuel or transportation surcharge to vendors and restaurants.

"It's quite nominal. It's more annoying," said River Klass, owner of the Firewood and Grounds restaurants in Murphys.

Klass reported getting $2 to $4 charges per delivery for increased diesel costs.

"What was tough is I had to call around when it went back down to

get them to take it back down," Klass said of the fluctuating fuel

market.

He said he hasn't adjusted restaurant prices as a result because

"things are tight enough" for people and it's better to "make better

portions (and) try to find other places in the restaurant to save."

The cost of food coupled with the transportation surcharge has

created a "double-whammy" for business owners, said George Segarini,

executive director Tuolumne County Chamber of Commerce and part-owner

of Christopher's Ristorante Italiano in Sonora.

It's hard for businesses with pre-printed price menus to constantly change prices, he said.

"You absorb it for a while and then you get to the point you can't absorb it anymore," Segarini said.

Food prices "away from home" are expected to increase between 3.5

and 4.5 percent this year, according to the U.S. Department of

Agriculture Economic Research Service. All food costs are expected to

increase from 3 to 4 percent, the ERS said in its March forecast.

The Bureau of Labor Statistics Consumer Price Index's most recent

report found fruit and vegetable prices rose 4.7 percent in March,

following a 6.7 percent increase in February. Potatoes, lettuce and

tomato costs all went up in that time.

Dairy and meat, poultry, fish and eggs also increased between 1.1

and 1.3 percent in March and 7.9 percent in the past 12 months.

Over the past 12 months, the consumer price index for food at home

increased 3.6 percent and the index for food away from home increased

0.3 percent in March, its largest increase since September, and has

risen 1.9 percent over the past 12 months.

The Labor Department's Producer Price Index shows many commodities

went up in cost, including corn which increased 82.5 percent from March

2010 to March 2011.

The cost of fresh and dry vegetables in February increased 48.7 percent from January.

Klass said it's not unusual for fruit and vegetable costs to increase when those items are not in season in California.

"Right now, tomatoes are coming from northern Mexico," he said. When Mexico's season is over, they'll come from Chile.

"Eat locally -I love that idea, local is a lovely thing ... As

Americans what we don't like to do is change our eating habits," he

said, explaining that people want salsa all year, regardless of what

crops are growing in the state.

Right now, "You can't find eggplant," or if you do, it's very

expensive, said Daniel Conway, California Restaurant Association

spokesman.

The Imperial Valley of southeastern California recently experienced

weather related crop shortages because of frost, Conway said.

Conway said the impact of gas and commodity prices'effect on

restaurants can especially be seen in the last two months. The fuel

cost hikes transportation costs so consumers are paying more at the

pump and have less to spend.

Conway said he imagines the rising food costs are more pronounced

in other parts of the country that don't have "the bounty of produce we

do."

Calaveras County Chamber of Commerce executive director Diane Gray

said she's heard some businesses have reported a decline in the average

meal ticket price over the last two years, but that there aren't enough

restaurants in Calaveras County to really "get a feel for that."

"Things don't change that quickly," she said.

However, Jamestown business owner, Mark Walsh, of Pizza Plus, said

increased food and delivery costs have forced him to increase menu

prices by 4 percent.

"I don't think that's going to be enough," he said. "Everything's just gone up, it's crazy."

On average though, most businesses in Tuolumne County "have been doing OK," Segarini said.

Tourist season is approaching and businesses will pick up, Segarini said.

"I think we're on the upswing as far as volume is concerned," he said.

Contact Lacey Peterson at lpeterson@uniondemocrat.com or 588-4529.

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