I read in the newspaper yesterday that the cost of cotton (just the raw cotton) went up 86% over the last year. I'm still trying to find someone in the fabric industry who can tell me what percent of the price of finished fabric is just the raw materials cost. (Guess I haven't found the right person to ask yet!)
Anyway... I would think that even the lower-priced merchants like Connecting Threads are going to have to raise their prices too, eventually. The increases can't all be absorbed by the makers.
From what I've read, it's all driven by supply (cotton harvest was low) and demand (we all like cotton T-shirts and towels, along with our fabric).
For the curious reader, you may be interested in knowing that the wholesale cost of the new lines is $4.75 - $4.90 / yard now, and you have to add about 25 - 30 cents shipping charges on top of that, to get the price that it really costs when it comes through the door at your LQS. That's up from $4.00 - $4.40 a year or two ago. All the makers are watching each other closely, to see who raises their prices and how much.
Blank has gone up rather a lot, and Kaufman too, as they have raised prices across-the-board, both on old stock and new. Other makers such as Moda and South Sea Imports generally only raise the prices on new collections, though they are inching up the prices on their basic groups too.
I'd say... buy basics and blenders when they're on sale, and use the savings toward buying pieces of the newer "focus fabrics" that you've just GOT to have to make your special quilts.