Get Out Your $#%@# Checkbook! Here Comes "Food Inflation"

Think you’re paying too much for food now? You’re going to pay more in 2008 according to Reuters.

“There’s going to be real food inflation in this country,” C. Larry Pope, president and chief executive of U.S. beef processor Smithfield Foods Inc., said at the U.S. Agriculture Department’s annual outlook conference.

Prices of grain futures have surged lately. For example, wheat futures have more than doubled on the Chicago Board of Trade over the last 12 months. Pope said meat shoppers eventually will pay for the rally because farmers who raise livestock cannot absorb the sharp escalation in feed costs.

Pope said the rip-roaring rallies in corn, soybeans and wheat would be good for farmers, but are “scary” for companies like Smithfield and the rest of the livestock industry.

“I think we need to tell the American consumer that things are going up,” he said in a speech. “We’re seeing cost increases that we’ve never seen in our business.”

Hasn’t someone figured out how to feed the damn cows grass again? Wasn’t Michael Pollan in charge of that?

Food industry says prices headed up again in ’08 [Reuters]
(Photo:amyadoysie)

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  1. Bay State Darren says:

    Think you’re paying too much for food now? You’re going to pay more in 2008
    Now is 2008 already.

  2. savvy999 says:

    Pollan, eh? I’m on the last chapter of Omnivore… I sooooo want to own like 500 acres and be a grass farmer.

  3. RoughSpin says:

    The price for pizza is going to skyrocket. I work at a pizza shop and we are already preparing to raise the price on pizza. The bakery where we get the sub rolls has already raised the price. Watch out for your neighborhood pizza shop going under quick.

  4. shadow735 says:

    Wow that steak has a lot of fat in it, food is going up because of Bio fuels among other things!!!

  5. smitty1123 says:

    Well, at least in Wyoming, you need to supplement grass with other feed because there is this little thing called “rain” that doesn’t happen very often.

  6. shadow735 says:

    @savvy999: but what kind of grass? :wink:

  7. I seriously wish people would smarten up and look at what biofuels actually are, and the TRUE cost of them. How is it saving the enviroment when you cut down forests and trees to raise crops for fuel. THEN, you have to ship that fuel b/c ethanol can not touch water, or else it becomes tainted, which negates sending it through pipelines. So you have land loss, and then all of the carbon from long haul trucking. But Al Gore says it will help, so I agree.

  8. EBounding says:

    This isn’t surprising. You try to take the food in your pantry to power your car and two things will happen: You won’t get very far, and you’ll have to pay for more food.

  9. @smitty1123: That and grass isn’t the most nutrient rich food. So you need to supplement to support the herd size on the property size, rain or not.

  10. Thorny says:

    I’ve been paying inflated food prices here in Hawaii for years. Velveeta for $14 a box? Yeah…exactly.

  11. Angryrider says:

    Yes! Increase the shit lagoons!!!
    Might as well save some money by eating clones.

  12. ARP says:

    They say a big component food prices is fuel/transport costs. With oil over $100, I can see how this will only get worse. I can only imagine what kind of cheap feed they’ll give the cattle that we eventually eat. And, I’m sure the FDA will be closely monitoring everything. I thought Iraq, constantly threatening Chavez, providing huge tax breaks for oil companies, ignorning Africa, easing mileage standards, etc. was supposed to bring oil prices down. What happened?

  13. elangomatt says:

    Biofuels are not all bed. Just the biofuels that depend on foodstuffs to make the ethanol. Someone needs to perfect the production of biofuel that uses other kind of plant matter that we don’t eat. (like the plant waste that we don’t eat like the corn stalks or switchgrass or something). Brazil gets pretty much all of its fuel from processing the sugar cane waste into ethanol.

  14. Beerad says:

    You mean the magical hamburger trees aren’t working anymore?

  15. ARP says:

    One thing that I’ve done to cut my grocery bill is to cut down (not out) on meat. I have it a few days a week, but not everyday (or for some, every meal). Not only is it expensive (and getting worse), but the amount of ressources (grain, water, fuel, etc.) needed to grow and transport it is huge. I’m not cutting it out, so I don’t worry about nutrient issues or feel like I’m depriving myself. Yes, you can live without it, but I love a good burger once in a while, just like others. I just don’t do it as much, and saves me money and is probably a lot healthier.

  16. @ARP: But this applies to all meat. Like chicken and pork and fish. Corn and soybean based feeds are plentiful and work great. But when you divert more and more to biofuels, you increase demand, and the prices go up. What do you think will happen to vegetables when farmers opt to stop with other crops, and goto soybean or corn just for the fuel industry?

  17. NotATool says:

    Can’t they just grind up the sick cows and feed them to the healthy ones?

    You might think this is a sick joke, but if livestock feed prices skyrocket, I will bet anyone that agribusiness will be tempted to pull crap like that.

  18. rdldr1 says:

    The cost of food is going up as a direct result of the increasing national demand for corn, raising its price. More expensive feed for animals means more expensive meat.

  19. eyebleave says:

    @Thorny: Your bigger problem is that someone has managed to convince you that Velveeta is food! They raise cattle on the Big Island, surely some if it is for dairy, get yourself some real food.

  20. eyebleave says:

    @Git Em SteveDave: I wish they would use all the soy for fuel and get it out of the food supply. My husband is allergic to the stuff and it is so hard these days to find food that doesn’t contain soy.

  21. Christovir says:

    @NotATool: Tempted? They already do this quite regularly, though it is now illegal. There are several books about it, including Mad Cowboy and No More Bull. When Howard Lyman, a rancher himself, revealed this truth on television in 1996, the National Cattleman’s Beef Association sued him (they lost).

  22. johnva says:

    @smitty1123: Then they shouldn’t raise cattle in Wyoming. They should raise them where it can be done most efficiently. There is a reason that cattle require much more land in places like Wyoming than in say, Alabama.

  23. johnva says:

    @Git Em SteveDave: Vegetables and stuff will go up in price, but not as much as meat. Because it’s much more resource-efficient to eat vegetable matter directly than it is to cycle it through animals.

  24. Ethek says:

    The devaluation of the dollar helping this right along, robbing value out of your bank account, sort of an inflation tax that drives up costs on everything. Thank slashed interest rates for this mess much like the housing bubble.

    Also, things like corn are big money now that Agri-business has the side of government to get ‘renewable fuel’ and ‘alternative energy’ legislation. Never mind the huge amounts of water this sucks up just to make fuel not food, and the fact that corn based ethanol takes more energy to process than comes out of the process. Thank do-gooders in congress that have no constitutional authority to dictate such things for that part. Let the market work without subsidizing ‘green’ or subsizing ‘oil’

  25. johnva says:

    @ARP: Yep, cutting down on meat is the best solution. There is no reason we all need to give it up, but it’s an unnecessary luxury to eat it every day or multiple times per day. I suspect that meat will become more and more of an occasional treat than an everyday thing for more and more people in the future. We just can’t sustain our current level of meat consumption at cheap prices.

  26. smitty1123 says:

    @johnva: Efficiency has very little to do with anything humans do.

  27. Funny story. Normally I shop at Whole Foods (cooking is the hobby I tend to splurge on). Last week I went to a regular grocery store, got the usual suspects, and for the first time it was just as expensive to go conventional!

  28. Dude, +1 for the Michael Pollan reference!

    I’ve noticed RIDICULOUS increases in my last couple bills. I’d been noticing things creeping up, but suddenly dairy products are absolutely ABSURD. As are nuts, incidentally (picked some up for a pecan cookie my husband likes). My grocery bills are just out of control suddenly.

    Even very basic things, like flour and sugar, have gone up 10 or 20 cents.

    On the somewhat plus side, I’m on a local agricultural board, and we’re seeing a lot of interest in buying local meat direct from local farmers, who are typically organic and/or traditional if they’re selling direct-to-consumer. Their prices are getting more and more competitive with supermarket prices since they, you know, feed the cows grass, not corn. But still. Dairy products are absurd and while I can live without meat, I need my dairy, and this is just ridiculous.

  29. Gann says:

    An interesting take on the idea of a farm. [www.ted.com]

  30. SBR249 says:

    NotATool: I don’t think cows are omnivores and can digest meat like they do grass and feed. Also, feeding healthy cows sick cow bits will likely cause the healthy cow to become sick, which is bad. There’s a reason downer cows are not allowed into the food supply.

  31. johnva says:

    @HRHKingFriday: Yep, I think it’s been moving this way for some time. The price difference has gotten to be so small that I don’t see much point in bothering with a separate trip to a “conventional” grocery much anymore. We usually shop at Whole Foods because we don’t mind paying for high quality food.

  32. Sherryness says:

    @Git Em SteveDave:
    They’re planning two ethanol pipelines here in Iowa. I guess someone should let them know they can’t do it.

  33. Gorky says:

    Not only is this because of Al Gore and all his “green” hippy friends wanting people to use biofuel made from of course corn, but its also rising because they also like to pay people to NOT plant stuff on their land (also under the guise of “green” land preservation) This also raises prices because there are less places to plant. Environmentalism will be the downfall of this country yet!!!

  34. smitty1123 says:

    @Gorky: Ford totally had the right idea in the 50s: [en.wikipedia.org]

  35. MBZ321 says:

    I work at a grocery store and EVERYTHING has gone up. White bread (yuck) that was 79 cents a few months ago is now 99 cents (and is probably being sold at a huge loss just to get people in to buy other stuff). Eggs that were 99 cents are now well over $2 dollars. Milk is insane, but I only like it in cereal, so that hasn’t effected me much. And if the prices haven’t gone up, the quantity has shrunk dramatically. Luckily, i’m still able to keep my weekly grocery bill (including household and health items) very low by shopping 3 different stores and BJ’S (Wholesale Club) and using piles of coupons.

  36. Gorky says:

    @eyebleave:

    You dont find that much soy in food products if you stay away from the “organic” section of the store where you cant find ANYTHING that isnt either fake meat, whole grain, or soy. You cant even get any WHITE organic bread or pizza crusts. They must think all people who buy organic want to eat super healthy

  37. tozmervo says:

    I’m so glad we’re still paying farm subsidies.

  38. Landru says:

    With so many hungry people in the world, it just seems creepy to grow crops to use as fuel in our cars.

  39. johnva says:

    @Gorky: Assuming that “all people who buy organic want to eat super healthy” may be a pretty good assumption on the stores’ part. Those would tend to be people who pay attention to what they eat, at least a little bit, by definition. So it’s probable that healthier foods sell better in the organic section.

    Also, I see organic white bread for sale all the time. But you’re right that there is less selection in organic convenience foods.

  40. Gondring says:

    @Git Em SteveDave: But if we can chop down more forests and replace them with grasslands, it will help to remove more carbon from the atmosphere. Old-Growth forests are very inefficient since they grow so slowly. Al Gore is right that we need to clear-cut and replant with fast-growing grass.

  41. plustax says:

    It will be interesting to see how many of the states that currently exempt sales and use tax on groceries will rethink their taxing policies with the rising cost of food just as some states did when gas prices started to skyrocket (changed from cents per gallon to percentage per gallon).

    California is currently driving towards a 20 billion dollar deficit this year and it does not charge sales tax on groceries unlike neighboring states. Not that I want to give anyone any ideas I’m sure they’ll stumble onto to that idea on their own soon enough.

  42. warf0x0r says:

    @RoughSpin: Oh my God!!! No, not the pizza, I need that!

  43. ludwigk says:

    @NotATool: “Can’t they just grind up the sick cows and feed them to the healthy ones?”

    No, because the FDA specifically prohibits feeding ruminant derived feed to ruminants, due the the scare of spreading prion-based diseases (bovine spongiform encephalopathy) from one cow to another.

    They did this in England, feeding sheep-based feed to cows, and it is believed that this is how BSE originated, by jumping species from the more common sheep version.

    However, you can give ruminant derived feed to poultry, and poultry based feed to ruminants, so really, you just need to cycle it through another animal first!

    The moral of the story here is to buy beef that is vegetarian fed.

  44. balthisar says:

    It’d be nice if they’d quote a percentage. If it goes up 5%, then no big deal. Then again, 20% is a big friggin’ deal.

  45. TangDrinker says:

    2 weeks ago I noticed the frozen Barilla meals (which normally are around 7 bucks, or around 5 with a coupon) were going for $8.99. 9 dollars for some crappy frozen pasta. This is in NC, by the way.

  46. trujunglist says:

    I’ve definitely seen prices go up. My grocery bills are insane these days, and I really try not to buy much meat. Living off of veggies is how I’ve been trying to roll, but I still need some meat every other day or so. Hopefully I can cut some costs by planting this spring, otherwise I’m eyeing that dirt patch near my patio….

  47. BugMeNot2 says:

    well i guess they can just stop giving farmers subsidies to not farm and let them farm so we can lower prices.

  48. catnapped says:

    @johnva: Supermarkets around here are already getting stuck with loads of meat that they can’t sell for the prices they want (have to mark it down to get rid of it). I don’t see the logic in jacking prices up even further if people already aren’t buying.

  49. Andon says:

    “We’re gonna’ finance anybody! Talk to my son Timothy in the finance department!

    Fuck you, son!”

  50. redkamel says:

    they should just recycle dead people into bars to feed the healthy humans.

  51. ARP says:

    @redkamel: Please say you know the movie Soylant Green?

    Al Gore has backed away from supporting Ethanol. GWB is making a big push for it. The problem is that the transport costs, energy to create it, amount of corn, needed, etc. simply don’t add up compared to the energy derived. Of course the politicians want corn based ethanol because they score political points with a huge swath of the midwest. Most are moving towards bio-diesel, electric, or switchgrass based ethanol as it has better overall efficiency

  52. bohemian says:

    One of the biggest problems with ethanol is that were still driving everywhere and in gas guzzling cars, were not cutting consumption. Then there is that whole quotient that corn really isn’t a good fuel stock.

    Right now a couple of the ethanol companies are in a race to see who can get cellulose ethanol into full production first. There are areas they can grow grass for ethanol that you can’t grow corn. The whole quotient of energy in vs. energy out in cellulose is much better than corn. But I digress. I know way too much about this living in the Midwest and I did an extensive paper on this last year.

    We are tripling our garden this year with the intent of freezing & preserving much of it for the winter on top of being a food source for the summer. We also bought 75# of flour since it is still cheap. We have cut back on our meat consumption quite a bit and are relying more on veggies. It will be interesting to see where prices are at when the farmers market opens back up in a few months.

  53. youbastid says:

    @Andon: Dead Burnt Lesbians.

  54. czarandy says:

    Maybe this will encourage us to get rid of farm subsidies?

    Then again, probably not, although we can hope.

  55. Panamapeter says:

    Maybe the cause is converting corn to ethanol for cars. The government has shifted the cost of gas to the cost of food. They think people are too stupid to understand this. Looks like they were right. Remember, vote republican. Four more years

  56. kdoyle55 says:

    this is old news…cmon consumerist

  57. azntg says:

    You know, my mother came back from a supermarket the other day and she expressed her utter shock at how much prices rose. She went about ranting, comparing today’s prices with the prices that she used to see in the late 80′s. Quite interesting.

    To be fair, my mom’s the main breadwinner in our house (after dad retired early due to Parkinsons Disease) and the last time she shopped regularly is in the late 80′s/early 90′s.

    Yeah, things are getting expensive. You know it’s really getting out of hand when the things you were able to buy for $5-6 eight years ago cost $10-11 now.

  58. mantari says:

    This is what happens when you try to turn your food supply (corn) into fuel (ethanol). And turning corn into ethanol is so terribly inefficient, didn’t they figure out that it was a net _loss_ of energy?

  59. johnva says:

    @catnapped: Well if that keeps happening they will stop ordering so much, and the producers will stop raising so much. Consumption will fall. Seems like a good thing considering the environmental effects of producing cheap meat.

  60. HooFoot says:

    The franchise supermarkets in the area have been jacking up prices every week. However, for reasons I have yet to figure out, the small, independent ethnic markets in the area have kept their prices reasonable. Example: my big chain grocery store sells onions for $1.69/lb., the independent Asian market only a block away sells the same onions for $0.59 cents/lb!

  61. @Sherryness: pipelines, or plants?

  62. Gorky says:

    @johnva:

    I for one would love to eat more organic food since it has no chemicals in it. The problem is that Im not a health nut. Maybe it is because of my location but if I want organic bread there is no white bread, if I want pasta there is no regular durum pasta only nasty whole wheat pasta. I can forget about finding regular potato chips, all they have is weird blue potato, soy crisps, and veggie chips. Frozen pizza? nope, just whole wheat crust with soy cheese and fake pepperoni. Where is the normal GOOD organic food.

  63. youbastid says:

    @Gorky: Whole Foods and/or Trader Joe’s has all of those items you just mentioned.

  64. Gorky says:

    @youbastid:

    Dont have either of those places near Harrisburg, Pa :(

  65. marsneedsrabbits says:

    @HooFoot:
    You wrote: Example: my big chain grocery store sells onions for $1.69/lb., the independent Asian market only a block away sells the same onions for $0.59 cents/lb!

    Yes! Why is that? I recently had to stop eating wheat altogether, and when I go for rice flour, I just go to the Korean market down the street. It costs a small fraction of what the same stuff at the grocery store costs. Same product, size, manufacturer, etc. So now I buy my vegetables & stuff there, or at the Mexican Fruiteria. Same brands and everything.

  66. ninjapoodles says:

    Just another reason to scrutinize local grocery sale fliers, and combine those sales with manufacturers’ coupons for maximum savings. It seems like an ordeal at first, but once you get the hang of it, it’s really easy. Check [www.thegrocerygame.com] and see if they have store “lists” for your area–they do the heavy lifting for you, for a very small subscription fee.

    I haven’t paid more than 50% of shelf price for groceries in a couple of years, now, and average about 65% savings at the register most of the time.

  67. balthisar says:

    Ha! Coupons, “Grocery Games,” and all that crap only work if you buy convenience products! Maybe you save $0.20 on the occasional roll of TP (just go to Sam’s). Buy fresh, cook fresh, and you’ll eat healthful foods much cheaper. You have no right to complain that a TV dinner doubles in price, because even at the original price it wasn’t worth it.

  68. youbastid says:

    @balthisar: Wrong. I have a drawer full of totally free Crest, Colgate, Aquafresh, and Edge shave gel, all from coupons and grocery games. I get 24 packs of Cottonelle for as low as $1.50. Tide detergent for $1. I get cheap cheese, cooking oil, dairy, and breakfast cereal. All far less than Sam’s or Costco. Not just convenience items by a long shot. All for a $1.50 investment in a Sunday paper and about 10 minutes worth of clippin’.

  69. Mike_Hawk says:

    The only thing left to do, is to eat children and the elderly.

    There is certainly no shortage of those running around. We could probably just import them and that way the righties won’t be all in a tizzy about chowing down on little white babies. We already know that lefties hate all life and will eat them as long as they aren’t a cow or god forbid veal.

  70. katewrath says:

    I know Consumerist doesn’t like to encourage naked cynicism in the general public, but I can’t shake the feeling that Mr. Beef Processor was angling for some kind of federal subsidy.

    I mean, he didn’t outright ASK for a hand-out, but I can’t think why the Agricultural Department has things like “outlook conferences” unless it’s to figure out who’s next in line for some government cash and how much they’ll need.

  71. SisterHavana says:

    Grocery prices really have gone through the roof. It’s very rare for me to be able to spend less than $35 at the store – and that’s by buying just a few things, buying things on sale, etc. Not so long ago if I spent $35 on groceries, it would mean I was really stocking up!

  72. MrEvil says:

    I can’t say I’m complaining. After all those years of helping my dad plant a wheat crop, getting good rain and then after we paid the harvester, the storage fee, the transportation and all the other associated bullshit thrust upon farmers by the middlemen we were lucky to get a month’s wages out of a harvest.

    And stop bitching about the farm subsidies. None of us are driving $60,000 pickup trucks and eating filet mignon at every meal because of farm subsidies. They’re barely enough to buy a load of Diesel and a load of seed. Heck, my dad have gotten plenty of money from disaster and regular farm payments and we have no immediate plans to quit our full-time jobs.

    Not only that, but we have to compete on a GLOBAL scale. The US is the largest IMPORTER of food in the world and we have to compete with other nations that give their farmers even MORE money and have a lower valued currency.

  73. LionelEHutz says:

    It seems like it is the time to making Soylent Green.

  74. LionelEHutz says:

    @LionelEHutz: That should have read: It seems like it is time to start making Soylent Green. I forgot to delete the “the”. Need. More. Coffee.