Nevermind Gas, What's Up with Food?

Anyone else worried about the impending food crisis?

Our local Costco's don't have any more rice nor dried beans. Some local retailers here are selling rice at 3 or 4 times what it was 6 months ago. News articles on food supply tensions around the world.....DANG! What's next, wheat, corn, meat, produce?

Anyone think that making food into fuel is to blame?

seattlite said:

Anyone think that making food into fuel is to blame?

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That's part of the problem. It's also costing companies much more to ship the food from the production center to the store, so prices go up that way too.

It's a great time for people like me to start a diet..

Takes petroleum to produce, process and transport food.

I've noticed the steep rise in food prices over the last year. It's gotten bad enough that I'm sure it's already affecting a lot of people's health, including mine. I saw a person with a shopping cart full of store brand cheese doodles on line. I asked out of curiosity if they were having a big party. They said no, they were on sale this week and it was the only thing they could afford which would fill them up. Yesterday I noticed that Malt-O-Meal was on sale for $1.33 a bag and the large 42 oz oatmeal was $1.99. Both items were cleaned out save the last bag of Malt-O-Meal over which two women were fighting. Fortunately I found pop-tarts on sale for a buck, so at least I'll have breakfast this week, unlike last week. I've never seen anything like this. I'm going to make sure we grow vegetables. This year we'll have to buy the seedlings from Garden World in early May. Next year I'll start my own from seed packets in February, then transplant them outside in late April.

Lots of reasons for the rise in food prices. I suspect fuel is only a small part of it. A lot of farms have been less productive due to climate shifts. The only certainly is once people are hungry and/or cold, you can expect things to start getting pretty ugly.

Wheat is really bad now too, along with all grains. Wheat is particularly bad in the US because a lot of farmers were persuaded to grow corn for ethanol instead of wheat for grain, so on top of rising production and transportation prices, there is a moderate shortage.

Also, don't forget that most fertilizer is petroleum based.

What marduke said, also the rice producing countries in south east asia are lowering export hoping to artificially inflate rice price like what the arabs did with oil.

My wife was describing the upward price trend she has been observing on certain food items. Eggs, milk, orange juice, etc...

Where's Subumbra? He should have something enlightening to say about this...

- Chris

I am employed by a fairly large grocery chain and here's what I have been told and have seen for myself --

The average 18 wheeler gets about 6 mpg. Fuel around here is close to $4.70 per gallon. Your local groceries come from all over the world. It takes fuel to get them from there to here.

The weather may be warm and sunny where you are right now, but the climate has been pretty terrible in much of the growing regions all over the world for quite awhile.

The profit margin in this business isn't what you think it is. If one can in a tray of twelve gets dented, there is a loss for the whole tray, not a profit. That's from the time the can is filled and out the door of the processing plant until it gets into your shopping bag.

Stores require lights, heating, cooling, employees, maintenance, insurance, etc. It all adds up.

Lately, everything that can go wrong, has been going wrong. Trust me, there aren't a whole lot of people I know getting rich in this business (I looked at my retirement plan recently -- ugh!) and we're a pretty darned good company.

Here's a shock for most of my customers -- we are not running a charity! We do donate a lot and help out the community a lot, but the bottom line should be black, not red.

So, what do we all do (I do not get a discount, by the way)?

Look for quality. Store brands are not necessarily generics. Ours are as good or better than national brands. Buy the best you can afford as with everything. I raised a family by not using national brands because no one could tell the difference from our brand or actually liked ours better.

Be sure you know the return policy. If something is not right, can you bring it back? If you do not like something, let someone in the store know and see what they can do to make it right.

Shop smarter. Check the unit price on the stuff you buy. That's the part of the shelf tag that tells you the cost per pound/quart/whatever. The big package is not always the best deal. If you can't find that information easily, shop someplace else! It is not uncommon for some companies to market a box of cereal with the same outside dimensions as others but with less product in the same size box. You've now been warned -- buyer beware!

Read the label. Do you really want the extra sugar, preservatives, etc.? If it isn't sweet enough or salty enough, you can adjust it to your tastes and it will cost you a lot less for your sugar, salt, etc. than for the manufacturers. Do you want chemicals added to meats to retain water -- and add weight (that you are paying for per pound) for nothing? Do you eat the shells that you are paying for (per pound) on that frozen seafood? Is that "juice" 10% with water and high fructose corn syrup or is it 100% juice? What other juices make up that "100% juice?"

Know what labels mean. Look for "Prime" and "Choice" meats. "Select" grade is the third string and most people don't like it. If nobody eats it, it is not a good deal, is it? "Natural" does not mean it is organic. "Multi-grain" is not whole grain.

Here's the biggest tip -- Do not buy what you do not need. It is OK to tell the kids, or yourself, "No."

Remember, not only does the government not like to use the word "recession," but that they will never, ever use the word "depression." Times are tough, maybe not for every single person here, but for an awful lot of us. It is worse than most people know and won't be getting better for quite awhile. You have to do what you can.

Fuel, food, health care, and housing. We've got problems with all of the new four horsemen.

Holy crap, I wasn't aware of this. We've had the usual slight price increases around here, but nothing this drastic. Everything that was on sale two months ago is still on sale, and still at about the same prices.
I wonder if (when?) this is going to hit us...

Fallingwater said:

Holy crap, I wasn't aware of this. We've had the usual slight price increases around here, but nothing this drastic. Everything that was on sale two months ago is still on sale, and still at about the same prices.
I wonder if (when?) this is going to hit us...

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A couple of weeks ago I saw on the news that pasta price in italy has doubled or tripled, I assume that's not the case where you live?

Food prices are up about 4-5% in the last year (link) , which is slightly more than the 3% or so inflation rate (link).

So, there is only a slight increase in the cost of food relative to the overall inflation rate.

chmsam said it well. Sensible diet and shopping will get you through much of this. Have to be flexible and versatile in food choices. It's going to be rough on families with big shopping bills. I see their carts loaded with colorful cardboard boxes and packages... many are going to have to learn "a crash course" with tough lessons on frugality and pressure to get their priorities straight. So much of what is consumed is frivolous junk food with minimal nutritional value and high cost. Unfortunately, few will be able to adapt to new consumption patterns and will continue to cling to old ways, piling up even more debt as they try to maintain living standards. The screws are tightening silently - especially in the 3rd world - food riots and price controls are starting

Anticipating higher prices in the future, it makes sense, if you can, to stock up on essentials. If you live in Earthquake country and take prep seriously... then you're basically tuned in to what needs to be done already. By buying surplus and cost averaging out you will offset much of these inflationary pressures caused by the current weak dollar policy.

Here in Canada I have seen much less price increase. The 5lb kidney beans are about $4.50... about 75cents more than I was paying in 1998.
The premium California brown rice in 5lb paper bags is around $4.50 too - again up about 75 cents in 10 years. Organic oatmeal in 2lb bags in $2.19 up from $1.90 4 years ago. Cans of name brand tuna and salmon have hardly moved $1 more per 6 pack in 10 years. Supermarket brand tuna is exactly the same price for a 6 pack as I was paying in 1996'. No name 12 packs of beans are at $7.49 up from $5.99 about 5 years ago. Fruits and vegetables are almost unchanged in the last decade. I don't know about dairy prices because I never buy any (allergies). These are prices I see every week at the superstore up the street. Browse the online flyers and compare prices

Cutting meat and dairy from your diet save a lot. Problem is even doing that and going with store brands is still more than a lot of people can afford. The problem isn't the rise in food prices itself, but rather the sudden rise in gasoline, heating oil, natural gas, and electricity, combined with a stagnation in already low wages, which are causing the problem. Housing may not be going up any more, but it is still way higher than it should be relative to general inflation. Many people I know were barely getting by a year or two ago when this all began. Now they're not getting by at all. Paying higher prices for other things is squeezing the food budget. I know quite a few people cashing in IRAs just to pay for food. These are not people who buy expensive crap like Lunchables, but people who know about coupons and store brands. Sadly, I just don't see much relief in the near term. We're paying the price for years of leadership concerned only with the next quarter or next election rather than the next generation.

Part of the reason pasta and bread prices have gone up (at least in the US) is the ethanol production issue, bad growing seasons for US wheat producers, and (according to my fiancee, who is graduating from the Ag school at Virginia Tech this spring) a totally dismal failure of the Canadian wheat crop, which supplies a large percentage of the total. I'm not sure about where you guys are, but I know that we haven't seen decent citrus fruits for months, either. I think the gas prices are making everything worse though.

Like the comment about the "four horsemen," very nice.

I'm late for the party. I've been watching food prices closely for some time and the last few weeks have been very interesting with food riots (and several resulting deaths reaching the western hemisphere) over the price of rice. I think we're seeing just the tip of the iceberg now. The nastyness has just begun. China, Vietnam, India and Egypt (all rice exporters) have either reduced or cut off their rice exports this year. Thailand just announced that they may reduce rice exports.

With Thailand traditionally exporting one third of the world's rice exports -- just the announcement triggered a panic since the price of rice has already more than doubled in just the last year.

The misery has just begun. Sam's announced this week that they are restricting rice purchases to level's equal to their customers previous buying history. I'm glad I got there last week.

I agree with others who stated that ethenol is just a contributing factor in all of this though it's enemies will single it out and make its role look even worse than it actually is -- if that's possible.

IMO lots of people are going to die quietly over this while we get really sick of election coverage.

jzmtl said:

A couple of weeks ago I saw on the news that pasta price in italy has doubled or tripled, I assume that's not the case where you live?

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It has slightly increased, but it certainly hasn't doubled, let alone tripled.
The pasta I usually buy used to cost €0.50 per half kilo, and now it's at €0.65. I found another brand that even now costs €0.55 per half kg, so I got a few packs of that.

Regardless, let's hope this situation is temporary.

This thread has convinced me to go to the store tomorrow and stock up on basic foodstuffs. It's all long-lasting stuff, so I'll keep it as backup while I buy normally. Hopefully the situation can stabilize before the prices really shoot through the roof, but if it doesn't and they do I'll be saving some money.

Still, now that oil is becoming even more serious a problem than it already was, maybe more money will go into nuclear, alternative energy and battery technology. Well, one can hope...

Primary causes:

- Expensive oil -> Producing bio-fuel not food (esp. US, due to gov. subsidization)
- Lack of political action in handling food inflation.
- Excessive meat consumption (a lot less inefficient than eating grain, rice, veggies)
- Poor weather/climate perhaps, but probably not main cause.

This in combination with a recession (thats what the IMF calls it anyway) is not very good for American stomachs. I really feel for you guys suffering from this, lack of money even for food must be horrible.

Expensive energy and meat consumption are probably why you pay so much for food.

powernoodle said:

Food prices are up about 4-5% in the last year (link) , which is slightly more than the 3% or so inflation rate (link).

So, there is only a slight increase in the cost of food relative to the overall inflation rate.

Click to expand...

True, however the coupling of the two poses an "interesting" (optimistic word choice) problem, now my money is worth even less and prices are constantly increasing.
The question is, how will those (me included) unable to "stock up" deal with the increase. I think it is obvious that times will be rather lean for many in this position. On the same note I shudder to think what it will be like for those in developing countries. I think Sub_Umbra illistrates it pretty eloquently!

Sub and I were talking about this--what?--months ago, was it? And I was talking about this back before these increases, in the thread(s) on the economy.

It's really not that food is getting expensive. It's that it's getting UN-cheap. If that sounds like the same thing, it's not. Food has been kept very low for a long time now, for economic reasons. A bushel of winter wheat used to cost like $3, IIRC. Or even less. That's 60 pounds of wheat for $3. This pricing meant that grain farmers were only just clearing a profit over their equipment and fertilizer and other costs. Given what's involved in producing it, wheat really should cost about $15 a bushel. And in the not too distant future, that's what it will cost.

It's all connected. It's going to be a ripple effect, and you will see food prices go from 2x to 5x what they are now.

It's all just so clear to see if only you look at the big picture and know what's actually going on in food production, or, as it is called "agribusiness".

As for my wife and I, we're not yet affected by all this because we've always paid premium prices for locally grown food (most of it "organic"), and those items haven't responded as quickly, because the margins aren't so tight. But they'll rise too, of course.

We're only beginning to see the consequences of economic and agricultural policies enacted decades ago, as well as the economic consequences of the war in Iraq. It's going to be bad. Very bad. Come back to this thread in 6 months or a year and see if I wasn't right. Mark my word. We've been living off the indulgence and largesse of much of the rest of the world for a long time now, but soon the dollar will be totally dethroned as the worlds reserve currency, and the chickens will come home to roost like never before.

Unfortunately, I have to agree with JS.

We've (USA) lived a comfortably inflated life for decades. Our energy costs and therefore the cost of our food and almost all other necessities have been kept low, primarily by government subsidies of one type or another. Our poorest people in the USA would be considered wealthy by the rest of the world's standards.

We'll all have to adjust, some more than others. I'll have to drive less and smarter. We'll have to scale back or cancel some of our retirement travel plans.

I think the 3rd world folks, particularly those in agricultural cultures, will see less change than most.

Like my Mom said -- "We were already poor and living off the farm so we really weren't hurt by the depression". An oversimplification, but you get the picture.