Energy costs are down, but when will grocery prices follow?

From an article by Doug Zellmer in The Northwestern (Oshkosh):

The cost of gas and diesel fuel is in freefall — a victim of dropping demand and a general softening of the global economy.

Rising fuel prices have been the overwhelming culprit this year for just about everything that’s needed transportation to retail stores and other outlets. Trucks run on diesel, which nationwide averaged nearly $3.42 a gallon today, compared with about $4.10 a gallon a month ago, according to AAA Wisconsin.

Farm commodity prices, which play a role in the cost of food, have also dipped of late, but farmers are still reeling from a spike in input costs for spring planting and summer fieldwork, including diesel fuel and fertilizer costs that nearly doubled from a year ago.

So, when will consumers see lower prices in the grocery store?

Hold onto your cheddar cheese spread because it’s not likely to come right away to your favorite store. And when it does arrive, don’t look for drastic price reductions for most food items, said agriculture and food experts.

“The long and short of it is you probably won’t see prices shoot down dramatically. We’re still looking at food inflation of 5 or 6 percent this year,” said Brandon Scholz, president of the Wisconsin Grocers Association.

Paul Ketring of the Wisconsin Farm Bureau Federation, said lower energy costs and how much it will impact groceries is anyone’s guess.

“It’s too early to tell. The way the system works it doesn’t reflect those changes immediately,” said Ketring, who works with the Farm Bureau’s Market Basket Survey of grocery stores in Wisconsin.