Cost of Food Rising Twice That Of Last Year!

Submitted by SadInAmerica on Sat, 04/19/2008 - 10:50am.

Steve Tarpin can bake a graham cracker crust in his sleep, but explaining why the price for his Key lime pies went from $20 to $25 required mastering a thornier topic: global economics.  ~  (See Talking Back)

He recently wrote a letter to his customers and posted it near the cash register listing the factors -- dairy prices driven higher by conglomerates buying up milk supplies, heat waves in Europe and California, demand from emerging markets and the weak dollar.

The owner of Steve's Authentic Key Lime Pies in Brooklyn said he didn't want customers thinking he was "jacking up prices because I have a unique product."

"I have to justify it," he said.

The U.S. is wrestling with the worst food inflation in 17 years, and analysts expect new data due on Wednesday to show it's getting worse. That's putting the squeeze on poor families and forcing bakeries, bagel shops and delis to explain price increases to their customers.

U.S. food prices rose 4 percent in 2007, compared with an average 2.5 percent annual rise for the last 15 years, according to the U.S. Department of Agriculture. And the agency says 2008 could be worse, with a rise of as much as 4.5 percent.

Higher prices for food and energy are again expected to play a leading role in pushing the government's consumer price index higher for March.

Analysts are forecasting that Wednesday's Department of Labor report will show the Consumer Price Index rose at a 4 percent annual rate in the first three months of the year, up from last year's overall rise of 2.8 percent.

For the U.S. poor, any increase in food costs sets up an either-or equation: Give something up to pay for food.

"I was talking to people who make $9 an hour, talking about how they might save $5 a week," said Kathleen DiChiara, president and CEO of the Community FoodBank of New Jersey. "They really felt they couldn't. That was before. Now, they have to."

For some, that means adding an extra cup of water to their soup, watering down their milk, or giving their children soda because it's cheaper than milk, DiChiara said.

U.S. households still spend a smaller chunk of their expenses for foods than in any other country -- 7.2 percent in 2006, according to the USDA. By contrast, the figure was 22 percent in Poland and more than 40 percent in Egypt and Vietnam.

In Bangladesh, economists estimate 30 million of the country's 150 million people could be going hungry. Haiti's prime minister was ousted over the weekend following food riots there.

Still, the higher U.S. prices seem eye-popping after years of low inflation. Eggs cost 25 percent more in February than they did a year ago, according to the USDA. Milk and other dairy products jumped 13 percent, chicken and other poultry nearly 7 percent.

USDA economist Ephraim Leibtag explained the jumps in a recent presentation to the Food Marketing Institute, starting with the factors everyone knows about: sharply higher commodity costs for wheat, corn, soybeans and milk, plus higher energy and transportation costs.

The other reasons are more complex. Rapid economic growth in China and India has increased demand for meat there, and exports of U.S. products, such as corn, have set records as the weak dollar has made them cheaper. That's lowered the supply of corn available for sale in the U.S., raising prices here. Ethanol production has also diverted corn from dinner tables and into fuel tanks.

Soybean prices have gone up as farmers switched more of their acreage to corn. Drought in Australia has even affected the price of bread, as it led to tighter global wheat supplies.

The jump has left people in the food business to do their own explaining. Twin Cafe Caterers in lower Manhattan posted a letter on its deli cooler: "Due to the huge increase of the gas, the electricity, the water and all the other utilities, we had to raise the prices a little bit." It went on to say that all its food prices have risen, too.

Wonder Bagels, in Jersey City, N.J., posted a letter from its wheat supplier, A. Oliveri & Sons, saying the recent situation was unprecedented.

"The major mills across the country are using words like 'rationing' and 'shortages' if things continue," it said. "We will sweat out the summer together, hoping there will be some flour left to purchase at any price."

The letter called for an immediate halt to exports and a change in farm policy, "stop paying farmers NOT to grow crops." A new farm bill, stalled in Congress, would expand farm subsidies if it passes, however.

For some Americans, the resulting increases might be barely perceptible. The Cheesecake Factory raised prices by 1.5 percent at the end of February, Applebee's by 3 percent.

But for the poorest U.S. families, the higher costs may mean going hungry. A family of four is eligible for a maximum $542 a month in food stamps, which never lasted the whole month before, Food Bank of New Jersey's DiChiara said.

"Now food stamps go fewer and fewer days of the month," she said.

The Food Bank recently got a letter of its own from a key vendor. Its grim message: Sorry, but the prices they charge the Food Bank would be increasing 20 percent, due to food inflation.

Ellen Simon - AP Business Writer - April 14, 2008 - posted at


Talking Back

Folks, I've posted several times about using your refund and rebate checks for food.  Unfortunately many people are still going out and buying TVs, furniture, new cell phones, stereo equiptment, boats and "stuff".  You can not eat this "stuff".  The government is counting on you to be stupid, to go out and "blow" that money!  They are damn near begging you to go to WalMart and buy Chinese junk, when you pay tax on it, they get that money right back, not to mention the money that leaves the country.  DON'T buy STUFF, buy FOOD!  Support your local farmers and communities, keep your money here.

If you need "stuff", hit up local yard sales.  Someone else already sent their money to China and other foreign counties and have already paid taxes on that item.  If you must buy "stuff" do your best to buy things made in our country.  You can get by right now without a lot of "stuff" but you MUST eat and feed your family. 

This is just the beginning of a major food crisis here in the US.  It's being done by design.  If you haven't been putting food away, you need to do it NOW.  Many necessary food staples have already doubled in price and some have gone well above that.  There simply is NO WAY you can get through this crisis without feeding yourself and family.  Keep in mind, this mess will not be over any time soon... In order to maintain your health, your must eat "nutritious" non-gmo food and have a good supply of non-fluoridated water put away.

Just keep in mind, most of us except the wealthy are being reduced to a third world standard of living, yes, it is being done by design!  Depending on the choices we make, some of us will get through this mess but most people will be caught off guard.






Thanks for reading!  ~  SadInAmerica

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