HOUSEHOLD budgets are being put under increasing pressure as families are forced to deal with soaring petrol and food prices, as well as rising housing, electricity and secondary school costs.

The recently-released Australian Bureau of Statistics’ consumer price index revealed consumers experienced multiple economic pressures in the March quarter.

Almost all categories of food, including meat and vegetables, have risen in the past three months, and the cost of petrol leapt 5.4 per cent to 18.9 per cent for the year.

Wednesday’s figures revealed inflation had risen 1.3 per cent in the March quarter to an annual rate of 4.2 per cent – the highest point in nearly seven years.

Half the items in a basket of food items measured by the Australian Bureau of Statistics had risen by more than five per cent in the past year.

The latest bout of food price inflation has hit staple items, including bread (up 9 per cent in the past year), milk (11.6 per cent), cheese (15 per cent), eggs (5.9 per cent) and fruit and vegetables (6.2 per cent).

Tamworth business Marker’s Cake Shop has felt the full force of increased food ingredient prices.

Nemingha Fruit Store owner, Michelle Cutcliffe, said her business had absorbed the price rises for six months rather than pass them onto customers, but as a result, she was now not making any profit.

“We have just recently had a good look at our bottom line and we are not making anything anymore. It’s a serious situation,” she told The Leader.

“We need to consider increasing our prices but because we are a smaller (convenience) store, that will impact our customer base, so it is a real balancing act.

“Some of our customers comment on the increasing cost of living and how it is affecting their families. Others really don’t understand or care why prices have gone up, they just complain that everything is too expensive.”

Rural bank Rabobank researcher Tim Hunt said food price inflation continued to be driven by a number of factors, including the increased price of food ingredients and other supply chain costs.

Mr Hunt said food price inflation would continue.

“The primary cause is a sharp rise in the costs of food ingredients due to three key influences – strong pricing for agricultural commodities in international markets, local product shortages brought about partly by drought, and the increasing costs of producing many food products due to sharp increases in the cost of feed grain, fertiliser and water,” Mr Hunt said.

“The underlying cost of raw food ingredients in the products we eat is an important component in the end price we pay at the retail level – but it’s not the only cost, and in some cases not even the main cost.

“Most products undergo some degree of processing, packing, distribution and marketing, and the cost of these activities has also been pushed up on the back of rising prices for energy, fuel, capital, plastic and

aluminium.

“Food processors, distributors and retailers are therefore facing rising costs on almost every front and are at least in part being passed onto consumers.”

The rising cost of basic staples such as flour, margarine and milk has forced the store’s operators to pass the costs onto customers – all cake, pastry and bread lines within the Peel St store have experienced mark-ups within the past six months.

Business co-owner Maree Tumeth told The Leader she chose to pass on the price increases rather than lower the quality of her products.

“All of our ingredients have experienced price hikes, with some changing every few weeks. We are forever making adjustments to our pricing and budget,” she said.

“Our customers are aware that it is out of our hands. (Customers) are always telling us how expensive it has become for them to do their weekly shop – every time they go to the supermarket there seems to be higher costs.”