Food Prices Climbing

Lori writes:

Last night, we were up at Christian’s on Pantops. The signs were all gone and they had little hand written signs announcing that the individual slice prices were going up by a quarter and $1.00 for a pie. I know that there was an article in Sunday’s Progress about Bodo’s raising their prices slightly (and still losing money on it). One of my friends thinks that the farmers are going to be making money, money, money but they don’t seem to remember (or know) how much gasoline is used.

(I’m suddenly remembering reading about the days of the Weimar Republic where people walked around with wheelbarrows full of money so they could buy a loaf of bread.)

It’s not just Christian’s, of course — prices are going up everywhere. Seth Rosen wrote about this in a pair of articles [1, 2] in the Progress this weekend. Bodo’s is taking the cost their bagels up $0.10/apiece, since the price of flour has tripled — it’s not enough to even things out for them, but it’s an improvement. Local schools are having a tough time providing food for the kids. The food bank has seen demand climb, and food stamp cases are up 10%. My wife and I went to buy a bag of grain for our horse at Southern States last week, and the price had doubled (and the quality reduced).

Remember that your standard factory-farm fertilizer is petroleum-based — your food is literally bathed in oil, and at $118/barrel, that fertilizer is getting expensive. The price of diesel has doubled, so our food economy — premised on the notion of cheap, fast transportation from California, Mexico, Chile, or New Zealand — is getting pricy along with it.

66 thoughts on “Food Prices Climbing”

  1. It’s a good time to plant a garden at home. Time to bump that up the list from “must get around to at some point” to “priority.”

  2. Not to mention that internationally, food protests and riots are breaking out. I think at least one gov’t has fallen (Haiti?). The U.N. food guru Jean Ziegler made some alarmist statements last week, but he is a bit of a radical.

    I was Googling around and was reading in Time magazine about the food crisis and then realized I was reading an article from 1974! We got over that one, but the population is much larger now and in some ways the economy is more brittle. A Nixon republican would happily send silos of grain overseas, and the whole establishment was more internationalist in that sense, and the ag lobby in Congress would be happy about it all too. Today, I’m not so sure we have that flexibility and willingness. For example, GW Bush’s ideologues put through a scheme where food aid goes to market, so people pay a little for their food, rather than given out soup-kitchen style. Sounded good free-market style, but it undermined the local production of food. If I recall correctly, that is. Several countries have banned the export of staple food. India only allows exporting high-end basmati rice now.

    It’s easy to blame Wall Street. The enthusiasts there went wild funding ethanol plants in the Midwest to the point where there were construction shortages. And now food prices are skyrocketing in poor countries. Yet another speculative boom.

    The U.N. has declared the Year of the Potato, which provides more nutrition than wheat & rice per acre, on worse land, but takes more work. The idea is to encourage eating potatoes, which takes some convincing. Some people have even claimed that the world has run out of space to grow wheat & rice, but that seems unlikey, except in particular areas. Shades of Ireland.

    By the way, the introduction of potatoes to Germany & Poland is mentioned passingly in the last Live Arts play, Mother Courage. Hungry invading armies in the 17th century thought the peasants were starving and digging for grubs & roots. Saved the locals.

  3. >>It’s easy to blame Wall Street. The enthusiasts there went wild funding ethanol plants in the Midwest to the point

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  5. Jogger,

    I can’t understand you. You shouldn’t be talking with your mouth full.

  6. That’s my new disemvoweler at work. When somebody (read as: Jogger) writes something stunningly stupid (i.e., Haitians just riot for the heck of it; starvation is good because it slims down the fatties), I click a button and — *poof* — the vowels are gone. Anybody who really wants to can figure out what’s been written. Everybody else can just ignore him.

  7. Pizza goes up $0.25 and people are reminded of the Weimar wheelbarrows….

    Let’s look back a little bit. From 1978 to 1985 the prime interest rate was above 10% – in fact at one point it rose to 21%. Can you imagine paying 21% on a home loan? People did, and the world wide economy did not collapse.

    In 1980 and 1981, the US inflation rate was above 10%. Today it is just above 4%.

    In 1971, prices and wages were getting out of hand, and Nixon instituted wage and price controls. Anyone heard any politicians suggesting this lately? Nixon also instituted price caps for oil in 1973 – that won’t work today as most of our oil then was domestic.

    In 1973, while I was in college, we could only buy gasoline ever other day – if it was available – and had to wait in line to buy it. Paying $4.00 gallon for gas today is much better than not being able to buy gas at all. Even at $4, it is still way too inexpensive.

    When I lived in England in 1980, and was being paid in US$, 1 pound was $2.40. Today it is $1.97 – much cheaper.

    Frankly, I think things are much much better today than they were 30 years ago.

    And as for the peak oil nuts, yes, we will run out of oil one day, but it won’t happen over night. Remember, these are the same nuts who told us that Y2K would cause the world economy to collapse on January 1, 2000.

    And definitely, putting two oil guys in the white house was a very bad idea at a time when production declined and demand went up. I sure would prefer to see the (borrowed) $350 million a day being spent in Iraq and Afghanistan better spent on research that would reduce our oil dependency.

  8. Waldo, don’t be so sanctimonious. Being a University type you of all people should accept and appreciate other peoples points of view even when they do not agree with yours.

  9. This a forum for frank and open discourse…as long as Waldo agrees with it. Ridiculous. Beijing meet Waldo.

  10. Jogger, you’re a troll. You post things that you don’t actually believe — frequently lying openly — simply for the purpose of getting a rise out of people. You are, in short, an ass. Whether I agree or disagree with you is irrelevant. People post things on every day that I strongly disagree with. The difference is that they don’t behave like asses.

    So, sure, you can keep posting here. But you lose your vowels. Don’t like it? Start a blog. Use another discussion forum. Go away. I don’t care what you do. But I’m not obliged to host your asinine comments anymore than you’re obliged to let me post stupid notes on your refrigerator.

  11. I haven’t listed to Pacifica new for a while, on WTJU. They are ranting hard on the world food crisis & ethanol right now.

  12. Careful, Waldo. By disemvoweling jogger, you elevate him in a way….though elevate him to where or what I don’t know. While I like your invention, I think most of us are able to see through the BS. In fact, trying to sort out the BS is part of the enjoyment, even with someone like jogger. By the way, you left in at least one y that was acting as a vowel (stop the lunacy).

    In regards to the topic, there is no question that, given unchecked world-wide population growth, we will one day begin to run short of food. Why not now?

  13. Careful, Waldo. By disemvoweling jogger, you elevate him in a way….though elevate him to where or what I don’t know. While I like your invention, I think most of us are able to see through the BS. In fact, trying to sort out the BS is part of the enjoyment, even with someone like jogger.

    I’ve dealt with hundreds — no exaggeration — of dopey trolls like “Jogger” over the years. I’m in very familiar territory here. :) The idea behind disemvoweling stupidity is that it encourages him to contribute positively, or at least not stupidly. He can write things that I disagree with, and they remain intact. But if he writes something asinine, just for the purpose of being rude, that gets disemvoweled. It’s a simple system of punishments and rewards. If he’s unwilling or simply unable to control his impulses to behave like an ass, I’ve got another half dozen tools available to me. And the final step is to simply ban him, something I clearly absolutely no problem with doing.

    Like most trolls, he professes to despise everything and everyone, and invents facts just to get a rise out of people. The result is that people waste their time arguing with him about topics on which intelligent minds do not normally disagree.

    And then there’s my standing offer for trolls. I get to write whatever I want on pieces of paper and mail them to their home. They have to post those pieces of paper on their front door, no matter what they say, and leave them up forever. I get pictures periodically. If they do that, sure, they can write whatever they want here. After all, since they expect me to do the same thing — though online, where far more people are likely to read it — it’s only fair that they’d do the same for me.

  14. Oops, disemvoweled myself on “sometimes”. I hate it when that happens.

  15. the statement “standard factory-farm fertilizer is petroleum-based” is misleading and essentially wrong. Agricultural fertilizer is primarily derived from synthetic anhydrous ammonia, which is produced by the reaction of nitrogen and hydrogen under high temp/pressure. The nitrogen for this reaction comes from the atmosphere; the hydrogen comes from a variety of sources (including water, natural gas, coal and crude oil). Both nitrogen and hydrogen are plentiful.
    The high temp/pressure environment required for the reaction of nitrogen/hydrogen demands significant energy (hydrocarbon) inputs. This can come from a variety of sources, including oil. However, natural gas is by far the predominant resource used to provide the energy for fertilizer production.
    Natural gas, like oil, is an increasingly costly resource. And the extraction/production of natural gas, oil and petroleum can be tied together (natural gas is one by-product of the petroleum refining process). But the idea that food is “bathed in oil” is untrue.

  16. el_nino, that’s all awfully interesting. At Tech, we only learned about petroleum-based fertilizer (in my integrated pest management class — it wasn’t a class specifically about plant nutrition), and it’s the only sort that I’ve read about. While I’m not intellectually equipped to say whether or not what you’re writing is correct, you’ve strung together enough big words that I’m convinced. :)

  17. To finish off the Weimer Republic story. Weren’t these the folks whose inflation rate was so bad that they would renegotiate wage rates twice a day……My understanding was that they finally dumped all of their worthless money in the streets and traded the wheelbarrow for a loaf of bread. Are we suffering from an inflationary economy? Oops, sorry, that was back on subject.

  18. I wouldn’t call that back on the subject. You think it;s funny now but I predict by December it is likely you will not. I might be wrong, there have been previous crises, etc. But there is actual U.S. poilict at use here, and with split party control in D.C. this is active political issue, not just a joke. I heard some dude on Diane Rehm try to make a joke about Sam’s Club recent restrictions on rice purchases – because big bags of rice are so funny to salaried think-tankers I guess – and it was just not funny considering people elsewhere who are having trouble getting any rice to eat.

    Washington Post is running a big Sunday A-1 story today. Welcome to the conventional wisdom.

    “The food price shock now roiling world markets is destabilizing governments, igniting street riots and threatening to send a new wave of hunger rippling through the world’s poorest nations. It is outpacing even the Soviet grain emergency of 1972-75, when world food prices rose 78 percent.”

    In a positive sign for democracy, Haiti changed gov’t and Malaysia may be next. That would not have happened in 1974 under Duvalier.

  19. Besides, we’re not in Weimar Germany in the 1920s. We’re in Germany after the failed expedition to the Caucuses and the siege of Stalingrad. The president cannot go out in public to a general audience with getting jeered. At the sports stadium in the capital where the National Anthem is sung before every game, the president’s first pitch was drowned out by boos. March 30, 2008.

  20. Forgive the perhaps overly pedantic tone of my previous post. Just trying to highlight that fact that fossil fuels (in various forms) are in fact completely intertwined into modern industrial agriculture, beyond just the cost of crude. Other resources (like natural gas and coal) — resources that are becoming increasingly scare and therefore expensive — are just as vital to the system as it stands.
    I haven’t started hoarding brown rice in my half-buried schoolbus out at the compound, but am I starting a garden in the yard.

  21. Gardens! Why on earth day isn’t there a big movement there: the equivalent of Victory Gardens of WW II. Seeds are very low cost to ship & my fertilizer is compost made of my kitchen scraps. I’d love to see a lot of lawns (& the huge emissions from mowers) replaced by bean poles & tomato cages.

  22. A friend of mine in Kansas sent me this yesterday:


    Bunge Ltd.’s (BG) first-quarter net income jumped to $289 million, or
    $2.10 a
    share, from $14 million, or 5 cents a share, a year earlier.

    A Thomson Reuters survey of analysts, on average, projected earnings
    of $1.14
    a share for the quarter.

    The White Plains, N.Y., agriculture business and food processing
    company said
    that it is “unique” time in the global agribusiness and food
    industry. High
    commodity and fertilizer prices reflect the global demand for key
    and products.

    Sales rose 70% to $12.47 billion from $7.34 billion.

    Bunge expects 2008 per-share earnings of $7.10 to $7.40, and earnings
    of $980
    million to $1.02 billion.

  23. Elizabeth, it’s a great idea (modern victory gardens), but it seems our current administration is more interested in encouraging continued consumption (of random consumer goods and gasoline) than in encouraging/modeling conservation, savings, and sacrifice.

    Be sure to spend that tax rebate on more pointless crap, Americans!

  24. Urban homesteading is a sound idea this year. I’m putting in chickens for eggs. Tripled the size of my garden and will start canning again (and hey, less grass to mow!).

    Many people used to live this way– a few chickens and a vegetable patch in the backyard, even in the urban areas. This is as good a time as any to start breaking the chain of our over-reliance on processed foods.

  25. Our local governments show a decided lack of vision to plan for the usage of land lying vacant to grow food, by not giving incentives to the local population.
    I repeat there are some interesting times just over the horizon if we do not start getting a few things right…energy and food to name just two….

  26. I go to Bread Works on Preston Avenue and buy the dough and make my own pizza. It’s awesome, very simple and I know exactly what goes on and in my pizza. Works best if you also buy a pizza stone. Christian’s is great, but when you make it yourself it’s even better!

  27. Both the food and housing “crisis” share some interesting simularities that begs the question “What happens when we get exactly what we’ve asked for?”

    For years, people argued the case of developers that we need to build more homes to increase the supply so that homes could be more affordable. Here’s what that looks like folks… You see, everyone wants housing to be affordable, until they want to sell their home. Were we duped by developers and lenders? Yup, but it was a brilliant lie, because it was true.

    The food situation is the same. For years the falling price of grain has been talked about and there have been countless campains to save farming and artificially inflate the price of grain. Now, biofuel has given us exactly what we’ve asked for. Kansas and other farming communities are booming again due to the high price of grain caused by the demand for biofuel. We saved farming! (So why isn’t anyone smiling?)

    It’s like the proverbial Imp in the Bottle, we’ve gotten everything we’ve asked for but perhaps we should have been far more careful about how we phrased our request…

  28. Lonnie, You are correct to a point. Farmers are doing better, but in the case of commodities it seems to be more a case of deregulation that is driving up the price by brokers. In the case of wheat, the people I work with tell me in the past bids on wheat were made by people who intended to take delivery. Now you can watch the market rise for two weeks and then drop when investors take their profit. I was listening to a discussion the other day where one person felt what we were seeing in food prices was the same as what ENRON did with the energy market. I’m not offering that as fact, but it is an angle I would not rule out.

  29. It already costs me $1,000/Month just for food to feed my family. Those squirels on my back deck are looking real good lately!…JC

  30. Flour seems to be cheapest at Giant. Canned beans are less at Kroger. The tomato plants at Giant, and last week at Whole Foods look great.The peeper plants from Southern States are loving this rain.(I am stopping at various stores when I have multiple errands in different parts of town- not really a gas spendthrift:) Every time I see a good sale on non-perishable food I am stocking up for my family or the food bank as my pantry overflows- was raised by people with memories of Depression… Seriously- what happens to our food supply if there is a trucker strike because of the cost of fuel?

    However, we are surely the lucky ones when one reads stories like the one on the front page of the WP today about the family who sold their last goat because of the children crying with hunger.

  31. Today on the WNRN news report was a story about how the economic stimulus tax rebates are about to start appearing in our bank accounts. I can’t remember exactly how the announcer phrased the story, but she said something about how Bush says these payments will help Americans deal with the rising cost of gas and food. That’s a big change in purpose from a supposed economic stimulus. Kind of ominous, really.

  32. Until speculators, investors, leave the oil and commodity markets and a strengthening of the U.S. dollar occurs we can continue to expect higher fuel and food costs. The bubble will eventually burst but it will be tough economic times for the forseeable future.

  33. Colfer: “Besides, we’re not in Weimar Germany in the 1920s. We’re in Germany after the failed expedition to the Caucuses and the siege of Stalingrad.”

    So we’re at a death toll of, oh 10M or so by now?

    Get a brain, idiot.

    Shrieking “BUSH IS TEH HITLER!!!!!!!!!!” at every opportunity has been going on for seven years now and in all that time it has yet to do one bit of good on anything. Bush has almost nothing to do with food and gas prices. The President of the US does not run the global economy.

    And Weimar Germany had a lot of problems, most of them unrelated to ours.

    Lonnie is right about getting what we ask for. Higher food and gas prices in the US are a good and necessary thing. We’ve been wringing our hands about global warming for 20 years now, and if anyone has yet come up with any better means than high prices to lower fossil fuel consumption, I’ve never heard of it. SUV sales are supposedly plummeting. Air travel costs are going up so fewer people will fly and less jet fuel will be burned.

    Likewise, if what so many folks here and elsewhere say about the wastefulness and unsustainability of our food system is true, price increases in it are the best possible stimulus to a better system – and if we’re importing less food from other parts of the world, that means more left for people in those parts to eat.

    Decades of folks making like Chicken Little and insisting that we need to stop driving big SUVs 300 miles per week and importing all our food from other continents, and the first thing that happens when we see conditions that will lead to such changes is the same people wailing and moaning about the end of the world as we know it. Well, if the bulk of environmentalists are right, the world as we knew it *had* to end, and now it’s starting to. What did you expect, some absurd eco-utopian fantasy? Consuming less means everyone is effectively poorer. Welcome to the Green New World.

  34. I’m interested in your reply despite your name calling. While it’s true warfare has rarely been conducted on an industrial scale since WWII, the development of offensive weapons has outpaced defensive weapons, and even nuclear weapons are vastly underestimated in almost any media report (see last weekend’s Washington Post magazine for example). So no analogy is perfect, but the human motivations of over-extending an empire seemed relevant to me, anyway!

    As for higher prices on scarce goods, disparity is political, and maybe you’re arguing for something you haven’t described, such a libertarianism.

    In one way I was foolish, predicting the divided gov’t in D.C. might move forward on the chicken little situation. Instead, the Democrats in Congress are sucking at the teat of Midwestern farm interests and have said they will do nothing. Despite record profits, the big farmers demand subsidies to undercut production in poor countries. Is that simple enough?

    What is not clear is whether the high food prices are the result of supply & demand or financial speculation.

  35. I wonder if the rich start running out of resources, if it would be acceptable for them to start eating the poor? In a free market sort of way, of course. Transparency of prices & all that.

  36. As an environmentalist, I’m not terribly bothered by the current economic situation. We needed higher gas prices, but I’d have prefered that they came from eliminating subsidies, not from being raped by Exxon (who has been seeing record profits recently). Ironically, the Bush Administration would have us solve the situation by giving more free oil to Exxon and BP so they can sell it back to us at $119 per barrel. (Once that oil is removed, it is no longer any more “domestic” than if it came out of Iran, as there are no requirements that it be sold back to the U.S. at a fair price.)

    Likewise, regarding farming, I think this would be an excellent moment for Congress to remove the subsidies on products like corn, since they are obviously not needed anymore. After all, many of those subsidies were meant to prop up prices which the market has already done. Now that Kansas is booming, they don’t need them anymore. Besides, subsidies are kind of like morphine; if you really need it then it can be quite helpful, but without due caution the resulting addiction can often be worse that the pain it was intended to treat.

  37. Its not Exxon that is making the most from oil prices, its the oil producers. We should not drill for more oil but, rather than using up what we have now, we should stop subsidizing corn ethanol and raise taxes on gasoline and thus reduce consumption and reduce the amount of money we send to mideast dictatorships.

  38. Uh, I beg to differ about Exxon making the most, even if I do agree with your suggestions. Exxon is indeed making record profits. In fact, according to the New York Times, while the average person is suffering from high gas prices, Exxon recorded the “highest profits ever recorded by any company, with net income rising 3 percent to $40.6 billion, thanks to surging oil prices.”

  39. Oil has gone up a lot more than 3% – Exxon is making more but they are not making close to the bulk of the difference.

  40. That’s just the net income as of February. It’s sales wre over $404 billion, and exceeded the gross domestic product of 120 countries. Their sales in the last quarter (as of February) went up 15%, and I suspect the numbers for this quarter will be even higher.

    Also it’s worth mentioning that we get most of our “foreign oil” from Canada, and more from Latin America than from the Middle East. While the oil we get from Saudi Arabia is no small deal, I think the attention given to imported oil is mainly to distract us from the real issue, our dependance on oil altogether. While increasing taxes at the pump is certainly an option, I think that revoking the massive subsidies we give oil companies is another approach we should strongly consider. After all, these folks currently take oil from public lands (often ruining them in the process) at prices set in the 1800’s.

    I’d rather pay the real cost of oil at the pump, than in my income taxes. Taxes at the pump, while they do have an indirect effect, is still just charging me twice while Exxon gets away like a bandit.

  41. Maybe the most interesting statement that will be made all year “Consuming less means everyone is effectively poorer.”
    I find it hard to believe that last year we had food and this year we don’t. “What is not clear is whether the high food prices are the result of supply & demand or financial speculation.” A third possible cause may be political manipulation of governments and constituencies.
    These are the “crises” I can think of off-hand: Social Security, oil and gas, housing costs, mortgage defaults, airline safety, airline reliability, airline prices, corn-rice-wheat prices, ozone levels, air polution, water polution,global warming, climate change, healh servics, health insurance, highway construction, highway maintenance, school performance, school finance, joblessness, homelessness… It seems once something is declared a crises, the government moves in and regulates more and spends more.

  42. Some of these crises are already supposed to be regulated….it helps a lot if the regulating body believes in, and therefore enforces, the regulations.

  43. I’ve found that the biggest problem with the Feds, is they tend to appoint the foxes to watch the hens. Or, they’ll appoint people for political reasons with no real knowledge about a given field. Good regulation is based on sound research, and done by independant parties with no vested interest in the outcome.

  44. I mean, I think you ought to have a vested interest if you are regulating something. If you don’t think there’s a benefit, how well are you going to regulate? Our problem now is regulators who don’t believe in regulations in the first place and essentially wish to see existing regulations fail.

  45. “Good regulation is based on sound research, and done by independant parties with no vested interest in the outcome.” Well-worth repeating. Regulators are supposed to serve the public’s interests, not that of their friends and families and employers in order to profit.

  46. So, in terms of the aforementioned ills that might be regulated (air pollution, water pollution, global warming, health insurance, airline safety, the mortgage industry, etc….), the problem is regulatory nepotism? I hate to ask, but are there lots of examples of this sort of thing?

  47. All of these crises are already regulated, some heavily. I’m saying the problem is, once something has been declared as being in a crisis, government and business get together and the price (either to the consumer or the taxpayer) goes up.

  48. I am in complete agreement that our government and businesses are in cahoots to purposefully and shamefully do a terrible job in regulating things that ought to be regulated, frequently at great cost (not always financially) to the citizens of this nation and the world.

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