Market forces propel the rising cost for groceries nationwide!

March 10, 2008 - Hungry for a simple chicken sandwich with sliced tomatoes washed down with a glass of milk? Prepare to fork over more money.

Throughout the grocery store, food prices are higher - brought on by forces as disparate as drought in Australia and demand for ethanol.

U.S. retail chicken prices in January were up 10 percent compared with a year before, while whole milk was up at least 20 percent and tomatoes 25 percent, according to the Bureau of Labor statistics.

Bread was up 5.4 percent nationally. Skyrocketing wheat prices mean higher flour prices, which means everything from pizza crust to cake are likely to see a price hike in the coming months.

And that side of egg salad? Not cheap. Eggs gained more than 30 percent.

"It just looks like everything's going up," said retiree Vivian Goodson, who was shopping recently in the Houston area. "Every time I go to the store, it seems like things are up a few pennies more."

Escalating food costs could present a greater problem than soaring oil prices for the national economy because the average household spends three times as much for food as for gasoline. Food accounts for about 13 percent of household spending, compared with about 4 percent for gas.

And consumers spending more on food have less disposable income to spend on items that keep retailers happy - from electronics to dining out. Food prices are rising while home values fall and the stock market falters - all of which can shake consumer confidence.

"It's the biggest risk we face economically, and it might be the thing that does us in," said Rich Yamarone, director of economic research at Argus Research Corp. in New York. "There's nothing really worse than having a job, making money and forking most of it over just so you can have the same amount of food. You're running in place, and it really weighs on you."