Grocery prices vary greatly across the state, a recent North Dakota State University Extension study has found.
For the past nine months, extension agents have been tracking prices for a bag of food items at businesses in large and small communities. Food items tracked included milk, eggs, bread, cereal, coffee and peanut butter.
The most significant price difference was for a gallon of milk, which varied as much as $3.80. The lowest price recorded for a gallon of low-fat milk was $3.09, while the highest price was $6.89.
Lori Scharmer, NDSU Extension family economics specialist, said the highest-priced milk was being sold in a small hometown grocery store in an oil-impacted area.
“That was the one item that we saw the largest difference in prices,” she said.
The pricing project began last September to identify trends in food prices as they varied by area, community and business size.
"The NDSU Extension Service was interested in finding out if there are significant price differences among oil-impacted and non-oil-impacted areas of the state or by the size of the community or type of food business," Scharmer said.
Economist Siew Hoon Lim, an assistant professor in the Department of Agribusiness and Applied Economics at NDSU, evaluated the data.
According to the data, those living in oil-impacted counties pay an average of 3.3 percent higher prices compared to those in counties without oil exploration activity.
“We assumed that prices may be higher in areas impacted ... but it was certainly not as much higher as we expected,” Scharmer said.
The price difference was determined after controlling for community size, store type and time period, Lim said in a statement. The data was not controlled by wages in the area. If a store owner has to pay a higher wage to attract workers, that may increase overhead costs and factor into prices paid by customers.
“That’s going to be in the next phase,” Scharmer said. “It will probably come this fall.”
The size of the community played a role in the price of food items. Lim found that communities with populations of more than 10,000 typically pay 5.7 percent less than communities with populations less than 10,000.
The cost was also 21 percent less in national chain stores and 6.3 percent less in larger supermarkets than it was in smaller supermarkets and local grocery stores.
However, shoppers consider more than just prices when choosing where to purchase groceries, Scharmer said. Convenience, loyalty to a business, time and travel cost are also factors.
Extension staff will continue to gather prices through the end of this year, Scharmer said. She said the full study should be published early in 2014.