Insane Price Increases

[weinoo]

Just today I stopped in at my local grocery store for a few items. I didn't need any, so I didn't buy any - butter, that is. But I noticed that the price for a pound of Land o Lakes butters is now $6.99. The last time I bought it (probably around the holidays, because I like it for baking), I paid $4.99.

That's insane, in my book.

Have you got any?

[judiu]

A loaf of plain old el cheapo white bread, store brand, went from 89 cents in April to $1.49 in June. This MUST be a bad dream!

[BadRabbit]

It would be easier to list the things that haven't gone up ridiculously. My grocery bill is nearly 30% higher a month over last year.

Edited June 9, 2011 by BadRabbit (log)

[HungryC]

Have seen small increases in milk & packaged goods, but I also noticed a BIG jump in butter. The Land o Lakes is now as expensive as the farmer's market butter from local, mostly grass-fed cows. Crazy, esp when the LoL is side by side on the shelf with Wal Mart's "great value" generic at nearly half the price. Hey, one industrial butter is as good as another, right? With creeping gas & goods prices, I'm trying to be more conscientious about preventing food waste....

[Deus Mortus]

Have seen small increases in milk & packaged goods, but I also noticed a BIG jump in butter. The Land o Lakes is now as expensive as the farmer's market butter from local, mostly grass-fed cows. Crazy, esp when the LoL is side by side on the shelf with Wal Mart's "great value" generic at nearly half the price. Hey, one industrial butter is as good as another, right? With creeping gas & goods prices, I'm trying to be more conscientious about preventing food waste....

I always buy the cheaper butter, usually I'm really picky about produce, but with butter I can honestly not tell the difference between the cheapest half a euro stuff and home churned or from a farmer's market.

[DanM]

It would be easier to list the things that haven't gone up ridiculously. My grocery bill is nearly 30% higher a month over last year.

About the same here. Its been bad enough that I have started stocking up the pantry. I just bought a 12 pack of Glenn Muir tomatoes from Amazon, of all places.

Dan

[slo_ted]

This morning I paid $1.49 a can for condensed milk. Not the sweetened stuff, but the regular kind. I thought it was high at 95 cents a can a month ago. The store was Smart & Final which has the best prices for canned milk in town.

[Boilerfood]

Have seen small increases in milk & packaged goods, but I also noticed a BIG jump in butter. The Land o Lakes is now as expensive as the farmer's market butter from local, mostly grass-fed cows. Crazy, esp when the LoL is side by side on the shelf with Wal Mart's "great value" generic at nearly half the price. Hey, one industrial butter is as good as another, right? With creeping gas & goods prices, I'm trying to be more conscientious about preventing food waste....

I always buy the cheaper butter, usually I'm really picky about produce, but with butter I can honestly not tell the difference between the cheapest half a euro stuff and home churned or from a farmer's market.

This. There isnt a local butter producer at my farmers market, so its either $1.25/lbs. industrial butter, or $5.49/lbs. industrial butter.

[annabelle]

Prices are up wholesale across the board nearly 30%. Corn is up 110% from last year, for example. Over half of the corn grown is tagged for ethanol production and not for feed. It's only going to get worse, too, what with all of the natural disasters in our nation's bread basket. Millions of acres of grain crops have been washed away and can't be replanted in time for harvest. Rice is already high and keeps climbing.

Where my mother lives in the San Joaquin Valley, dairy cattle have been being sent to slaughter since it is too expensive to feed them out now that the farmers are not allowed to irrigate their fields any longer. It is sad and depressing to see what I remember as verdant farmland turned to dry dustbowl. Dead grapevines, both raisin grapes and wine grapes. Parched puny fields of alfalfa and stunted cotton. Beef prices will be huge later this year. Cotton fabric will be priced like silk.

Our government is trying to tax and regulate us into starving to death in the dark. I don't know what my friends on the East Coast who heat their homes with heating oil are going to do this winter. My mom is not allowed to heat her home with her woodburning fireplace.

I've never been afraid of what the future holds in my life, but I am now.

Edited June 9, 2011 by annabelle (log)

[Panaderia Canadiense]

Prices here routinely rise around 30% per year, except on those staples that the government fixes at lower prices to prevent malnutrition. This means that rice, corn, milk, yogurt, and fruits and green vegetables of all types haven't changed more than 25 cents over the last year. Rice may rise slightly depending on how bad the flooding is on the coastal plains (how much of the crop is lost.)

The one I really notice is butter - 500g bricks were $1.10 last year this time, and now they're at $3.25 or some similar madness. Flour has also risen incredibly - 100 lb sacks were $18.50 and are now $23.80.

Beer has risen hugely, from 60 cents for a 1L big-boy of decent pilsener a year ago to 90 cents today (and the dang stuff keeps going up! I know it's due to the problems with the Canadian barley crop last year, but still....)

I am incredibly fortunate to be able to buy my panela directly from the trapiche owner, which means that 1 kg is still $1.00, but if I were buying it in a store I'd be paying closer to $5 for the same amount (and it wouldn't be nearly as fresh). White sugar has more than tripled.

I also count myself extraordinarily fortunate to live where I do. Ecuador is food-sovereign, which means we're not reliant on imports for our day to day foodstuffs. If I have to stop using wheat and switch to white corn and quinua flours entirely for the bakery, all it will affect is how I make bread, not the actual fact of having bread. I'm glad that to live here and starve I'd have to give up chewing.

All prices in USD (we use it too.)

Edited June 9, 2011 by Panaderia Canadiense (log)

[Lisa Shock]

It's being caused by speculators in newly opened food commodities markets, and their derivatives, not government taxes. At least in the US, federal taxation on foodstuffs has not risen in the past year. And, I am fairly certain that no state has imposed new 50%+ taxes on food in the past year.

China is hoarding certain commodities, and others are in slightly lower supply due to poor weather last year. But, market speculation is driving it. With most of the supply controlled by a few companies, we have little choice but to accept what is offered us.

[annabelle]

Market speculators are not, in my opinion, driving food prices. It's been rather a perfect storm of natural disasters, the refusal to produce our own energy and the cost to buy it from others that is driving the increasing price of food. Hell, Paul Krugman isn't even on board with the speculators are evil argument. And believe me, taxes are a big part of it. Our small rural town has nested taxation that adds up to over 9% on food purchases alone. Properties have been reassessed at a huge increase. Our dock fees alone increased 300% in the last couple of years.

As always, energy prices are the root cause.

[Lisa Shock]

Wholesale prices are up 30% in the past month, are you asserting that federal taxes have risen that much in the past month?

[Moopheus]

It's not your imagination. It's pretty clear that food processors are passing along cost increases, as much as they can. Particularly in the last few months. See The BLS numbers. Note that dairy is getting especially hard hit. This report says 1.7 percent increase in dairy for April. For one month in the seasonally-adjusted aggregate figures, that indicates a real change.

for myself, I'm just glad that the CSA that supplies a lot of my produce didn't raise rates very much this year--only two percent more than last year.

[janeer]

Part of it is very likely due to transportation costs to get that butter or whatever across the country at higher fuel prices, as well as general energy costs to run farm machinery and processing plants--very huge part of farming. But also likely, as store increasingly push their own brands, is payments for shelf space. It costs money to get space in stores; it's very competitive.

[janeer]

Just saw this, too. I had forgotten about this--bad winter and wet spring, late planting

[annabelle]

Wholesale prices are up 30% in the past month, are you asserting that federal taxes have risen that much in the past month?

I said no such thing. I am referring to wholesale costs over the last fiscal year for all foodstuffs, in the aggregate. My theory is that it is due to energy costs driving the costs of transportation and storage, as well as a poor growing season and natural disasters.

[nonblonde007]

Annabelle, I couldn't agree more.

[Edward J]

A-yup, fuel (diesel) prices and natural diasters a lot to do with it.

Take for example here on the Wet (west) Coast, this week is the first week it hasn't been raining since November. Most of the fruit crops are toast--rotting in the fields, bees won't go out when it rains so no pollination, and the bees aren't all that healthy either.

Is the States actually growing corn for fuel? Does this make financial sense? I know Brazil has made ethanol from the by-products of sugar cane, but the operative word is by-products of sugar cane. Would it not make more sense to invest money into harnessing energy that will always be there like sun, wind, tides, methane?

[Florida]

Our government is trying to tax and regulate us into starving to death in the dark. I don't know what my friends on the East Coast who heat their homes with heating oil are going to do this winter. My mom is not allowed to heat her home with her woodburning fireplace.

I've never been afraid of what the future holds in my life, but I am now.

Yeah, the government is trying to starve the citizens of the fattest country in the world... If only Ayn Rand were here to save us.

[Moopheus]

A

Is the States actually growing corn for fuel? Does this make financial sense?

a) Yes, b) no. But corn growers like it because it's a ready market, and it's subsidized. Not too surpisingly, demand for corn for ethanol has spiked in the last few years with high oil prices. It's more efficient to use sugar cane or beets, but those don't grow as well in Iowa.

Yes, energy costs and weather play a role (food costs are highly volatile for a reason), as do global demand and even financial speculation. The guys who play in the global futures trading market don't really give a hoot if you or I can afford to eat. The US sells an enormous (and growing) quantity of feed grain to China. China grows its own wheat and rice (or at least did until the recent droughts), but they import most of the feed for their chickens and pigs.

[BadRabbit]

It's being caused by speculators in newly opened food commodities markets, and their derivatives, not government taxes. At least in the US, federal taxation on foodstuffs has not risen in the past year. And, I am fairly certain that no state has imposed new 50%+ taxes on food in the past year.

China is hoarding certain commodities, and others are in slightly lower supply due to poor weather last year. But, market speculation is driving it. With most of the supply controlled by a few companies, we have little choice but to accept what is offered us.

Speculators are an easy target because most people don't understand their function in the marketplace but they are not driving costs. Transportation costs, distortion of the corn (read feed) market through government subsidies for ethanol, inflation of the money supply (and it's devaluing of the dollar) and natural disasters have all played a much bigger part in the rise of grocery costs than speculation.

Edited to add: You also are not taking into account the fact that most large companies are expecting a 20-30% increase in healthcare costs due to the implementation of the healthcare law. Govt. does not need to directly tax a good to significantly increase the costs involved in producing.

Additional edit: I removed my appeal from authority.

Edited June 10, 2011 by BadRabbit (log)

[Toliver]

Where my mother lives in the San Joaquin Valley, dairy cattle have been being sent to slaughter since it is too expensive to feed them out now that the farmers are not allowed to irrigate their fields any longer. It is sad and depressing to see what I remember as verdant farmland turned to dry dustbowl. Dead grapevines, both raisin grapes and wine grapes. Parched puny fields of alfalfa and stunted cotton. Beef prices will be huge later this year. Cotton fabric will be priced like silk.

I find this quite odd. I live in the San Joaquin Valley, as well, and this year is the first year in quite a while that the state hasn't declared a drought. In fact, the Sierras have a record snowpack this year and now the fear is of the flooding of low lying areas. The state has to release water from the dams to prevent them from overflowing due to the large snowpack melting as the weather gets warmer. It's expected to be in the mid-90's in a week or so in the southern valley so the melt will be starting soon if not already.

And the farmers can't water their fields?

I think a big portion of the food price increases can be linked to the increase in the cost of fuel. Remember the last time fuel was expensive and everyone stopped buying trucks and SUV's and started buying hybrid vehicles? Food prices went up along with the price of fuel back then.

Also, this year there has been the weather-related loss of crops. A lot of produce has been quite expensive (tomatoes, greens, onions, etc) lately due to poor weather impacting crops. Locally some fast food restaurants even stopped using tomatoes unless you specially requested them due to their expense. Fortunately, it should be temporary as the weather normalizes or crops from other countries come in.

[andiesenji]

We have had a "perfect storm" of weather events, economic disruptions and increased fuel costs that has and is driving up the cost of almost everything.

We see it most in foods because that is what we purchase most often.

Truckers or trucking companies have to pay more for diesel - a significant increase which IS due to speculators. And politicians whining about "more domestic drilling" are idiots because that oil does not stay in the U.S. It goes on the open market and is subject to manipulation by speculators the same as oil from Saudi Arabia or the North Sea.

Until our legislators have the guts to take away the subsidies to the big oil companies (who are making record profits) and tax their profits accordingly, they are going to continue to push for more access to oil in our pristine wilderness areas which is not going to do any good for the average American and has the potential to do irreparable harm.

Things could get much, much worse. Our infrastructure is crumbling and if the system of dams and waterways, that both protect and provide water to American farmlands, is compromised, it could take years to recover.

The average consumer in the U.S. has less control over supplies and prices than has been seen in this country since WWII, when prices were controlled to prevent runaway inflation and speculation.

Twenty years ago there were only a limited number of foodstuffs that were sold as "futures" now the speculators have gotten their crooked little fingers into almost everything and we have to pay for their profits.

[BadRabbit]

Speculators are not perpetual motion machines. They cannot drive up costs of goods (whether food or oil) for any considerable period of time unless the fundamentals of the underlying assets are also pushing towards increasing prices. That's why pump and dump scams are strictly short term cons. This is even more true in the case of food since the ultimate underlying asset is perishable and can not be driven up in price to the point where sale of the goods takes a long time.

Speculators are merely reacting to the fact that fundamental uncertainty is causing the prices in the markets to rise. The fact that half the middle east is on fire or exploding is causing the rise in oil costs because it has increased the risk that supply could be interrupted in the near future. The blame on the speculators is misplaced.

Edited June 10, 2011 by BadRabbit (log)