Prices for oil, corn and wheat have been dropping for months, but food prices in the supermarket are still climbing.

Food inflation slowed in October, according to federal figures released Wednesday, but grocery prices are still up 7.5 percent over last year.

Combined with the bad economy, the higher cost of eating is changing the way we shop for food – from choosing store labels over national brands to using more coupons to switching to cheaper cuts of meat.

"If you used to look for New York steak, you cut that to top round," said Les Allen, a retired Navy pilot who lives in Plumas Lake, as he loaded groceries into his trunk last week outside a Safeway in Natomas.

With key commodities down 50 percent or more from their midyear highs, economists project food inflation will continue to slow – but only so much.

"It's certainly not going to go negative," said Michael Swanson, the lead agricultural economist at Wells Fargo & Co. in Minneapolis.

Grain prices are still higher than they've been for most of the last 15 years, said Swanson and others, and many businesses along the food chain are recouping losses from the summer.

The American Farm Bureau conducts an annual survey of the cost of the ingredients for a basic Thanksgiving dinner for 10. This year it's $44.61, up 5.6 percent from last year, but still just $4.46 per person.

It's possible, of course, to pay a lot more. For $99.99, Raley's will feed 10 with a range-grown turkey and deluxe sides. Whole Foods offers $199.99 take-home spreads for eight featuring stuffed leg of lamb with poached pears.

Retail food pricing is complex, and it's often impossible to predict how a change in commodity prices will show up on store shelves, said Bob Reynolds, an industry consultant based in Moraga.

But a few trends are clear.

High fuel and grain prices drove up costs for big food processors, and those companies convinced retailers – even Wal-Mart – to accept the biggest price increases for their products in years. Retailers are pushing back now that commodity prices are down.

"It's a dance," Reynolds said.

Spikes in food commodities also influence the crops farmers plant. Potato prices are up 40 percent this year, for instance, in part because many spud growers opted to plant wheat instead.

The recent strength of the dollar makes U.S. exports more expensive, which is reducing foreign demand. Wholesale meat and poultry prices have fallen for that reason, among others, though retail prices haven't dropped yet.

While the slowdown in consumer spending is clobbering restaurants and retailers as well as meatpackers, it's not necessarily bad for grocers, said Jim Hertel, managing partner of retail consultant Willard Bishop LLC, based in the Chicago area.

"People who had been eating out are eating in," he said. "Their form of trading down is actually more trips to the supermarket."

Grocers benefit when shoppers switch to lower-priced store brands, Hertel said, because margins tend to run 8 to 10 percent higher on private-label products than on foods from the national manufacturers.

At Modesto-based Save Mart Supermarkets, the third-largest grocer in the Sacramento area, sales of private label brands are up 20 percent over last year, said spokesman Louie Yan.

West Sacramento-based Raley's Inc., the region's leading grocer, has made a big move into private labels – expanding from a handful of products in 2005 to more than 3,600 today. The strategy is paying off, said spokeswoman Amy Johnston.

"We're seeing an increased demand" for private label products, she said.

Like other chains, Raley's is promoting strategies for cutting grocery costs – like a campaign launched in September which lays out meals for a family that cost less than $10. The menus often emphasize the supermarket's private brands, Johnston said.

Coupon usage is also increasing. Nearly a third of consumers are using coupons more frequently than they did a year ago, according to a survey by the NPD Group Inc., a market research firm based in New York.

The holidays are usually a profitable time for supermarkets, Hertel said, though the season doesn't carry the make-or-break weight it does for other retail sectors.

In the Safeway parking lot, shoppers said they still plan to eat well this Thanksgiving – while also cutting costs.

"We'd wanted to do a big Italian meal with lamb and duck and a lot of nontraditional things," said Aaron Cabaccang, a planner with the state Department of Transportation in Sacramento.

But with the state budget crisis threatening to trim his wages and his wife expecting the family's third child, Cabaccang said he's decided to stick to the basics: turkey.

Call The Bee's Jim Downing, (916) 321-1065.