Food Prices Overcooked Given Decline of Corn, Oil: Chart of Day By Lee J. Miller and Alan Bjerga http://www.bloomberg.com/apps/news?pid=20601109&sid=aDmUKZXaaFlg&refer=home Jan. 14 (Bloomberg) -- Food prices should be lower, given the decline in commodities such as corn and crude oil the past six months, according to Robert Dinneen, president of the Renewable Fuels Association. ``Those who continue even today to suggest that ethanol and corn demand for ethanol production are driving food prices have lost all credibility because corn prices have fallen, energy prices have fallen,'' Dinneen said in a telephone interview from Washington this week. ``The only thing not falling today are food prices, and I think consumers are starting to wonder just what's going on.'' ``There are lots of food products for which there is very little delay -- eggs and chickens,'' according to the trade- group chief. ``Yet food prices are still up there.'' The CHART OF THE DAY compares the relative price changes of wholesale ready-to-cook chicken breasts in the U.S., crude oil and corn for March 2009 delivery. In a second panel, the monthly consumer price index on meats, poultry, fish and eggs for U.S. urban consumers is shown. Ethanol production has increased since June, ``when food versus fuel was at its peak,'' Dinneen said. ``What was really driving consumer price increases then were skyrocketing energy prices, increased demand, speculation.'' According to a Department of Agriculture estimate, U.S. food prices rose by about 6 percent last year, the most since 1980. Without biofuel production raising costs of corn-fed animals that supply meat, milk and eggs, food inflation might be 0.7 percentage points lower, the USDA has said.
I've noticed this at the supermarket. They are also downsizing every freaking thing by 10-20%. Tuna, etc. And snack foods, if you're dumb enough to buy them , are bags of air.
I think food retailers operate on very slim margins, they did back in the day. I recall reading about it in a magazine about 1965. If that's the case they are taking the chance they have to pile up some cash maybe...
Ya, I can count on both hands how many lays chips are in a $2.99/bag. It's rediculous. A while back, I saw that one thing that Wal-Mart was encouraging companies to do, was to decrease their packaging, in order to bring down packaging and transport costs. Their incentive was that if you reduced your packaging, you would still get the same amount of shelf space, so there wasn't a disincetive to reducing packaging.
Do you know the perils of inflation/deflation? Printing excess money under any circumstance will ALWAYS hurt the consumer with marginal discretionary capital. Recall the exact reason why Obama cannot change anything in this country without limiting the powers of the FED and their banking cohorts. All of his rhetoric about "change" can be compared to Bush's war mongering. Missing, a wise man like John Adams. Obama's newspeak in hollywood fashion will surely win him an Oscar among the unwise pundits. The 'educated' left will proclaim progress, and the 'less govt' right will parade their next puppet on stage in 4 years. Failing to mention, in the mean time, Sam is stuffing the poor with pennies on the dollar, which will inflate beyond any measure, or the lack thereof when m2 and m1 disappear entirely. So begins the sintilating ideas to protect the domain established by our forefathers. Tis the cycle of life.
how is obama's 700 billion spending package different from the 700 billion bank rescue package, so where's the change? btw how he they come up /w 700 why not 600 or 800 or 1 T, at least change the number man !!!
As someone who works in the consumer goods/staples industry, and who is involved in price setting, I can tell you that the reason many CPG companies aren't lowering their prices has nothing to do with conspiracy. It is more based on the belief that these lower prices will not be here to stay, and it is expensive and a long process for us to change our pricing structure - not to mention brand strategies that first have to be understood (in relation to competition). Incidently, food prices showed a 1.5% drop in the latest reading - the best since 2006.
'massive manipulation' - nice topic title conspiracy theorist. prices will be adjusted lower by sellers if no one buys moron.