High Food Prices Lead to Trade-offs Even in Upper-Income Household;
Stores Shrink Meat Packages, Push Inexpensive Cuts; Downgrade to Chicken at the Weekend Grill

 

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Source: WSJ

 

Category: Food and Drink, Inflation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Discuss: High Food Prices”

  1. Anonymous Jones says:

    Shouldn’t many of these food products be even *more* expensive?

    And if there are regressive effects (because we internalize some of the copious externalities of our overproduction of food), shouldn’t those effects be dealt with through transfer payments rather than the clearly terrible (as in, it’s literally killing us) policy of unnaturally depressing food prices through misguided corn (and other) subsidies?

    • Futuredome says:

      corn isn’t driving up nothing in price lately though. to much selective “bidding”. While some food prices have moved up lately, others have moved down.

  2. b_thunder says:

    1. People are catching on to the fact that “Stores Shrink Meat Packages, Push Inexpensive Cuts” and are getting quite angry. Such insidious way of doing business causes them to become more angry than if the vendors just raised prices. This is one of the major reasons why most people don’t feel the “recovery.”
    2. If you think this food “inflation without higher price stickers” will not have adverse effect on the ex-food retail sales in the intermediate and long term – you might want to think again.
    3. Higher food priced disproportionally hit lower income population. The stock market gains disproportionally benefit highest income population. More “popular”anger, more fuel for the talking head Fed haters who will “explain” to the masses that the Fed is driving them into poverty.
    4. US population is one of the fattest in the world. If the smaller packaging causes people to eat less, that may be a good thing. On the other hand, a lot of foods will be substituted by crappier and/or cheaper ingredients, which will not be good for the population.

  3. Lyle says:

    In particular not that eggs went up when corn prices went above 7.50 in the 2012 drought. Corn prices today due to the good rains in the midwest are 3.67. Eggs are a fairly short cycle product in that corn prices should be reflected in them in a few months. Chicken is comes soon after. The Economist price index shows that that all commodities in Dollar terms are down 3.1% and food is down 5.6% over a year ago. Pork of course is now a special case due to the virus killing piglets. Cattle should cycle around in between 18 and 24 months.

  4. jimcos42 says:

    Well, there they go again.

    I keep close tabs on household food expenditures, just because. What gets measured gets managed. (Drucker) Aside from being mindful shoppers without being OCD about it, we don’t get too excited about any of it. Our food costs are about 10% of our basic household expenditures. Restaurant meals and fast food are not included. It’s just my wife and I; two retired folk.

    For the past 12 months, our food costs are +2%.
    For the past 3 years, the annualized change has been +1.1%.
    For the past 5 years, flat.

    So I guess one could argue for some “acceleration.” But avocados? Come on. Unless you’re eating guacamole everyday, consumption can’t be that great. Beef? There’s none in our freezer. But we do have pork, chicken, salmon (fresh, line-caught), scallops, and tilapia. Eggs? Yep. Cage-free.

    Let’s talk about something else. Like if we don’t get some serious rain out here (CA) this winter, what’s Plan B?

    • RW says:

      My experience is the same: The overall trend in food prices has been relatively flat the past five years, some prices up and others down with many seasonally cyclic as one would expect. I tend to ignore posts where it is asserted food prices “prove” there is inflation since they tend to be tendentious and wrong.

      OTOH the drought in CA and much of the southern west is really serious business and seems to be growing: Since much of the nation’s fruits and vegetables are grown CA that is something that will show up in prices if the drought doesn’t break (that still won’t meet the definition of inflation of course) but I’m hopeful it will break too. I’m further north (OR) and there are plenty of vegetables grown locally so no problem there but we’re nearly 17 inches behind normal precipitation for the season and not used to dealing with water deficits that large.

  5. JohnT says:

    There is another aspect to higher food prices that I think should be mentioned, and that is the disappearance of foods – foods just not available anymore.

    How long has it been since you have seen a stewing hen? A capon?

    I have an early 60s edition of Joy of Cooking. Many cuts of meat these recipes call for are no longer available in grocery stores. I don’t know when I last saw a rump roast.

    I’m particularly fond of grapes. There are almost no grapes now except a couple of recently developed seedless, raised in Latin America, and flown in at great expense for jet fuel. Tokays are long gone. So are ladyfingers. So is my favorite, the muscat (there is occasionally a “muscat” in the stores, but it simply isn’t a real muscat).

    I would count disappearing foods as a form of inflation. We are told, of course, that huge agribusiness is just giving us what we prefer. But I think they are giving us what they prefer to, not for our taste, but for their profit. And I bet the cost of jet fuel is subsidized by the public.

    • Futuredome says:

      I have been buying more expensive non-gmo meet, because despite being more expensive in general, it has become a better deal.

      Your trying to hard and creating a worthless viewpoint.

  6. plato363 says:

    The comments show that most continue to be confused about the definition of inflation. Inflation is a general or substantial rise in the money supply. The change in prices is a symptom of inflation, but not inflation itself. At some point in time, inflation became synonymous with rising prices and definition stuck.

    Look it, we have inflation, as money supply (M2) had been increasing at an annualized rate in the range of 5% to 7% versus GDP growing around the 2% level year-on-year. Aggregated prices are being manipulated regardless if that manipulation shows up in whatever basket of consumer goods measured.

    • Futuredome says:

      What if growth is 3.5% rather than 2 percent? Personally, 5-7% M2 is not impressive. During the post-war era, it was notably higher.

  7. jbegan says:

    We began shopping at Discount Grocers a couple of years ago. You may not find the particular brands you favor, but it knocked our food costs down 50%..a much needed cut as two more bodies moved back home. Escalation in rents and a soft job market has more of an impact than food IMO. And, the local Dollar Store has a freezer section now. Aside from all the tin foil, stretch wrap, etc we used to buy there, they have a basic selection of dollar items, steaks, fish, eggs, bread, ice cream etc. I suspect the regular chain grocers are feeling the impact as their prices are higher than they were last year.

    Check the stock prices of The Dollar Tree (DLTR) : http://finance.yahoo.com/echarts?s=FDO+Interactive#symbol=FDO;range=5y

    and Family Dollar Store (FDO) : http://finance.yahoo.com/echarts?s=FDO+Interactive#symbol=FDO;range=5y

    Remarkably, Safeway ( SWY) had a bump this year too : http://finance.yahoo.com/echarts?s=SWY+Interactive#symbol=SWY;range=5y