From Milk To Meat, US Food Prices Spike Upward

[Purveyor]

The rise in grocery costs is up more in the first six months of 2007 than in all of 2006.

ATLANTA and BOSTON - A gallon of milk in Birmingham, Ala., is expected to cost $4.50 this summer, perhaps more. At Wetzel's Market in Glen Rock, Pa., the New York strip steaks that were on sale for $4.99 a pound last Fourth of July will be $6.99 this year. In Boston, some shoppers report checkout prices on certain items that are 30 percent higher now than last summer.

"Prices are incredible," says Suzanna Wyman, shopping Monday at Shaw's Supermarket in Boston's Back Bay. "Milk, I heard, is going up even more.... I love fresh peppers and vegetables, but they're too much. Cereal is very expensive compared to what you used to be able to get it for."

The reason people are smarting: Inflation in grocery aisles is up by more in the first six months of 2007 than in all of 2006. That means food costs are on track for the biggest annual percentage hike since 1980, according to the Labor Department. The anticipated 7.5 percent increase would readily outflank the 2.6 percent core inflation rate to date, which excludes food and energy. It's across every grocery aisle, too, from burgers to bagels, from duck to dumpling.

Added to sticker shock at the gas pump, high food prices, especially for meat, are forcing consumers to scrimp, coupon-clip, and ponder the possibilities of a deep freeze to take advantage of discounts, says Boyd Brady, an extension agent at Auburn University in Alabama.

---
The chief culprit is corn, namely No. 2 feed corn, the staple of the breadbasket. In answer to President Bush's call for greater oil independence, the amount of feed corn distilled into ethanol is expected to double in the next five to six years. Distillation is already sucking up 18 percent of the total crop. The ethanol gambit, in turn, is sending corn prices to historic levels – topping $4 per bushel earlier this year, and remaining high. All of this trickles down to the boards at the Chicago Mercantile Exchange, affecting the price of everything from sirloin to eggs (which are up, by the way, 18.6 percent across the nation).

---EOE---

http://www.csmonitor.com/2007/0613/p01s01-usec.html?s=u1

[aquart]

1. Thanks, George.

I thought hemp was more efficient for fuel?

[Sapere aude]

2. There was a song in a broadway play that went, "everything is going up!"

[Captain Angry]

3. Oh give me a break. Inflation?

If there were inflation, our government would report on it honestly, and the Federal Reserve System would do something about it.

Oh yeah, not so much.

I've seen prices go up. It's the hidden secret inflation. People raise prices due to the "high fuel price" then when fuel prices fall, they don't drop their prices back. Then fuel prices increase again, product prices rise to match the increase, etc.

It's crap.

[dethl]

4. It is me or does this feel like a repeat of history?

It's like China's Great Leap Forward except replace steel with ethanol.

[leftofthedial]

5. life in repuke Amurka

is just great, ain't it?

[tridim]

6. I've pretty much accepted the fact that I'll never have a good steak again

I haven't been able to afford it for years. This new hike cements it.

[Selatius]

7. Oil prices and this cause stagflation, where inflation hits even though unemployment rises.

Usually, the relationship between the two is an inverse relationship. When business picks up and prices begin creeping upward, there's a drop in unemployment. Likewise, when prices begin dropping down, usually a sign of excess production, unemployment begins to go up. In stagflation, both prices and unemployment can go up.

The only other times stagflation was seen was during the oil shocks of the 1970s.

[AX10]

9. From 2002 to 2005, inflation has stayed above the...

increases in wages. That was a form of "mini stagnation". The economy was growing as were wages, but inflation was still greater than the growth in wages. 1970's style stagflation is now a very real possibility.

[ikojo]

11. Last year I got a paltry 2% raise

I have a feeling prices increased more than 2% last year. With my paycheck I am expected to provide for my retirement and continually educate myself to keep my "skill set" current. How the &*^% can I do that when my wages don't increase?!

I HATE CAPITALISM!

[taught_me_patience]

20. I got 3%

and my rent got raised from $640 to $900. The paltry pay raise was not even enough to offset the increase in rent this year. I'm going to ask for another pay raise in a month or so to cover cost of rent, food, and gas!

[kestrel91316]

8. No biggie. We can all just eat cake, right?

[ikojo]

10. I just bought a gallon of milk...NOT GENERIC milk

in suburban St Louis and paid $3.43! Wow! Did the cows go on strike? And I am a serious milk-a-holic. I love my milk!

[Matsubara]

12. ...and inflation stats always excule energy and food.

Those two sectors have been high for years now, and they disproportionately impact poor and working people.

Big deal if computers and camcorders are cheaper. This is the stuff that matters.

[Selatius]

15. They removed energy and food from the equation on purpose.

Because Social Security checks to seniors are pegged to inflation. By removing energy and food from the inflation indices, you can make a killing in savings when you have to adjust from year to year annual payouts to senior citizens. The cost of living has now been replaced with the cost of just surviving. If they can no longer afford one steak per month, then now they can afford an equivalent amount of hamburger meat. If not that, then they can go eat dog food after that.

[brokensymmetry]

13. It's going higher. Much higher.

Think biofuels + climate change.

Forget longing for a steak - we will see a day
when the working poor cannot afford sufficient
calories.

[Johnny Noshoes]

23. Why am I seeing that scene

in Soylent Green where Heston gives Edward G Robinson that spoon with the strawberry preserves remains on it and Robinson breaks down and cries.

[brokensymmetry]

29. Because you have a vision of the future?

Seriously. I firmly expect to see famine in
America - and it won't be confined to the poor.

[gravity]

14. Blame ethanol

When the price of corn rises, it becomes more expensive to provide feed to animals which raises the price of meat and milk.

[WinkyDink]

22. Puts a new light on Bush's enthusiasm for ethanol, doesn't it?

[L. Coyote]

16. I saw a great bumper sticker, "My Hummer Runs on Food"

[Straight Shooter]

17. Gas up, food up, and I just got notice from Pac Power electricity is going up 13%.

Our water rates went up last year, our property taxes are going up, insurance costs for car and home have gone up. I don't eat meat, so there's nothing to cut back, there. Maybe I should buy a slow cooker to cook my beans instead of buying canned organic.

Guess what isn't going up? Yeah. My wages.

[AZBlue]

18. I used a coupon at the store the other day & the cashier said he'd never seen coupon usage as high

as it has been lately. As he commented, we have to make up for the high gas prices somewhere.

[taught_me_patience]

19. Add to that the incredible shrinking sizes

which amounts to a price increase.

http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20070606/BIZ/706060348/1005

Of course, food and gas have been taken out of the inflation stats, so according to the government... there is no inflation. My rent also has increased 35% over two years ago! WTF!!!!!!!!!!!!

[WinkyDink]

21. And yet some peopl,e think we need a VAT on top of this.

[live love laugh]

24. "The chief culprit is corn.." LIE. The culprit is gas prices. nt

[elocs]

25. Compared to the rest of the world we have cheap gas prices and cheap food prices.

Although $4.50 for a gallon of milk is high (it's $2.50 where I live in Wisconsin), compare it with the cost of food from McDonalds. It seems like every time I go there I spend at least $5. I think of the price of fast food when I see things like fruit prices, like apples for $1.29 a pound. What could I get at McDonalds for $1.29 that would be good for me. Plus, Americans are suckers for paying premium prices for brands of food. I'm from Wisconsin and I can tell you that generic milk or the store brand is every bit as good as any "name" brand and much cheaper. The same goes for most everything else. We need to put the price of food into perspective.

[live love laugh]

26. The price of food IS in perspective. It is all relative. While others may pay more, they

are used to those prices, their economies are stable with those prices.

The issue is skyrocketing prices and inflation. Our economy and the American population have been hit by astronomical inflation rates without commensurate wage increases. That is not something comparable countries are also enduring.

[entanglement]

27. Is it possible to get HONEST inflation figures anywhere?

n/t

[spinbaby]

28. Probably not

I know the prices of some groceries I buy regularly have skyrocketed.

[firefox_fan]

30. Don't worry, the main inflation index is stable and just fine.

Sigh

[Blue-Jay]

31. Whoops