Drive or eat? Gas prices surpass $4 per gallon on South Shore; grocery prices are up, too | SierraSun.com

Drive or eat? Gas prices surpass $4 per gallon on South Shore; grocery prices are up, too

Elaine Goodman
Sun news service

What would you rather spend $4 on: a gallon of gas or a gallon of milk? That’s the question facing South Shore consumers as the prices of both fluids were exceeding $4 per gallon this week at some locations.

At Safeway on Thursday, a gallon of Lucerne 2 percent milk was selling for $4.59, or $3.99 with a club card. Raley’s at the “Y” was selling a gallon of Bayview Farms 2 percent milk for $3.39, or $4.09 for the Sunnyside Farms brand.

An informal survey of several gas stations on the South Shore on Wednesday found regular unleaded selling for about $3.65 to $3.83 per gallon, but premium grades of gas were going for more than $4 per gallon at some stations.

Those needing a fill-up out at Kirkwood were faced with $4.69 per gallon for regular unleaded.

People interviewed in the Harrison Avenue area on Thursday had mixed views on what was worse: gas prices or grocery costs.

“Every day, you get in the car and it’s 10 cents higher,” Lynn Suzanne, a 70-year-old games dealer, said of the rising price of gas. “I just put $20 in and make it last.”

McKenzie Weimer, a 24-year-old student, said she’s accustomed to rising gas prices but can’t get over how expensive food is.

“I’ve gotten used to the gas price going up,” she said. “I can’t get out of the grocery store without spending $100.”

According to the Food Marketing Institute, retail food prices increased by 4 percent in 2007 – the largest increase in 17 years. Prices for eggs, dairy and poultry showed the largest increases last year.

And no relief is in sight.

“Many of the factors that caused the 2007 increases have continued or accelerated in later 2007 and early 2008,” the institute stated on its Web site.

Dave Heylen, spokesman for the California Grocers Association, said several factors have contributed to the increased cost of groceries. “Obviously, the rise in fuel prices has impacted the entire food-distribution chain,” Heylen said. Increased fuel costs affect farmers, processors, manufacturers, distributors and retailers.

Corn is being diverted from its more traditional uses and is being used instead for ethanol fuel – and the dwindling supply is causing prices to go up. And foreign markets are demanding more raw dairy, which also is driving up prices, Heylen said.

Add to that costs that are hitting most businesses harder these days, such as employee health care.

“You add all those things up. … It’s the consumer that in the end will feel that,” Heylen said.

As for gas prices, AAA of Northern California reported this week that the statewide average cost for a gallon of regular gasoline had hit a record high of $3.58, a 46-cent increase since the last AAA gas-price report Feb. 12.

“The cost of crude oil, the raw material from which gas is made, has reached a record-high price of $108 per barrel,” Sean Comey, spokesman for AAA of Northern California, said Tuesday. “A year ago, it was selling for about $60.”

The plummeting value of the dollar is one reason why oil prices have risen, Comey said in a news release. But falling currency values do not seem to be sufficient to account for the entire run-up in crude prices, he said. Financial speculation in the commodities market may be another reason.

The highest average gas price in the Northern California communities where AAA monitors fuel costs was in Tahoe City, where regular unleaded was selling for $3.75 per gallon. The lowest price among Northern California cities tracked by AAA was in Chico, where gas sold for an average of $3.51 per gallon.