It's become a fact of life for shoppers braving the grocery store aisles: high food prices. But with the cost of oil going down, some shoppers are beginning to wonder... when will they get a little relief? "It certainly does make you think that gas prices will eventually lead to food prices going down," said Janel Holden, an Edina mother of three. You could call it the "sticky prices-situation." And according to the experts, it's caused by several factors. Dr. David Vang, a professor at the University of St. Thomas, says one key reason for the high food prices is the uncertainty the prices at the pump are here to stay. "A lot of transportation firms are still worried about whether the price of fuel is going to stay low. So they're keeping their transportation prices for customers high," Vang said. But, he added, ethanol programs that have displaced other crops has also increased prices. Beyond that, he says, even the relatively weak dollar has played a role by promoting exports. "Which is great for farmers because they can export a lot. But on the other hand, it causes agricultural prices to be high, historically," he said. But there's hope for those holding out for a break... Vang says competition will eventually return to the literal market. "At some point, one of the companies will say, 'if I cut my prices and everybody keeps theirs high, then I get more out of the market share.' Eventually it plays out," he said. As for when you can expect that relief -- Vang says it will likely happen within the next six months, barring any sort of calamity or crisis that could send the price of oil soaring again.
(Copyright 2008 by KARE. All Rights Reserved.)
