The NY Sun says that Costco has resorted to “rationing” bags of rice in California and flour and oil in New York due to limited supply:
The bustling store in the heart of Silicon Valley usually sells four or five varieties of rice to a clientele largely of Asian immigrants, but only about half a pallet of Indian-grown Basmati rice was left in stock. A 20-pound bag was selling for $15.99.
“You can’t eat this every day. It’s too heavy,” a health care executive from Palo Alto, Sharad Patel, grumbled as his son loaded two sacks of the Basmati into a shopping cart. “We only need one bag but I’m getting two in case a neighbor or a friend needs it,” the elder man said.
The Patels seemed headed for disappointment, as most Costco members were being allowed to buy only one bag. Moments earlier, a clerk dropped two sacks back on the stack after taking them from another customer who tried to exceed the one-bag cap.
“Due to the limited availability of rice, we are limiting rice purchases based on your prior purchasing history,” a sign above the dwindling supply said.
Shoppers said the limits had been in place for a few days, and that rice supplies had been spotty for a few weeks. A store manager referred questions to officials at Costco headquarters near Seattle, who did not return calls or e-mail messages yesterday.
An employee at the Costco store in Queens said there were no restrictions on rice buying, but limits were being imposed on purchases of oil and flour. Internet postings attributed some of the shortage at the retail level to bakery owners who flocked to warehouse stores when the price of flour from commercial suppliers doubled.
Rice prices have skyrocketed in the past few months. Marketplace says prices are up 60-70%:
International demand is greater than the supply of available rice. That’s led several key rice-growing countries to impose export restrictions — resulting in even tighter supplies. Prices are also being driven by some of the same forces boosting all commodities — a weak dollar and high fuel prices.
Are the high rice prices hitting your home?
Food Rationing Confronts Breadbasket of the World [NY Sun] (Thanks, Ryan!)
(Photo:greenwenvy08)
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@gmss0205: What you’re talking about is the production cost of gasoline. It’s not the “true” price because there are externalities that aren’t captured. For example, the consumption of a limited resource, and the environmental damage caused by extracting, transporting, and refining the oil.
@AD8BC: While ethanol may be responsible for some of the food shortages, it’s not responsible for this one. Rice is grown in flooded paddies. Corn and sugar cane (the two main sources of ethanol, currently) are grown on dry land.
Forgot to add that, besides, ethanol, another factor in the food shortages is the increased consumption of meat. Beef, in particular, is become a staple in countries where it used to be a luxury, as their middle class expands. It takes roughly 700 calories of feed to make 100 calories of meat, so the increased demand for meat reduces the overall efficiency of the food system.
@ChuckECheese: That does make sense. Rationing supply to control hoarding/greed. The “greed” word threw me off, but that’s exactly what hoarding is.
I’m surprised no one has raised the issue of the devaluation of the U.S. dollar. The dollar isn’t worth what it used to be which means more of them are needed to buy oil. You need oil for the gas needed to transport and do all the other things necessary to get food to our grocery stores.
I saw a report on ABC news last night about profiteers hoarding rice. So, while supplies are high and sufficient to meet demand, the rice is not getting to the marketplace. The price increase is artificial — in the sense that there is manipulation in the market.
Fuzz: I wonder how many people switched from corn to rice as their staple? Maybe beer and liquor producers have started to use more rice and less corn?
/commodities is the next bubble
@synergy: You’re right. The convention is that oil is priced in dollars. Therefore, a weak dollar necessarily means higher gas prices.
My father owns a small bakery, when flour prices doubled this year, I had to drive down to Costco and buy flour from there instead of our local distributor. We’re also Chinese so we eat rice almost everyday and the cost of rice has doubled too.
We eat a lot of rice and nothing with wheat in it at all.
Rice has pretty much doubled in the last year, as have most of the other non-wheat grains we buy.
The Asian grocery stores sell rice for much less than the Costco 2 miles away, so… just because it’s at Costco doesn’t mean it’s the cheaper.
@ChuckECheese: I don’t understand your math. The Costco limit was one 20 lbs bag. That would only be a 40 day supply (eating half a pound per day) for one person, or 8 day supply for a family of five.
@doireallyneedausername: If we base “TRUE market value” on the rest of the world, I demand their prescription drug prices, too.
@ecwis: I refed the NY Sun article mentioned at the top of the thread, where a person talks about buying much more than a 20 lb bag: [nysun.com]
@Mr. Gunn: I totally agree with your comment about commodoties (food) being the next bubble, but unfortunately, almost all average citizens will be cut out of this one. Most of the countries that eat corn as a staple have probably gone on, not to rice, but to food rioting, such as happened in Mexico this year.
[www.alternet.org] and [cupofjoepowell.blogspot.com]
@ChuckECheese: I can guarantee you that whoever purchased a “three years supply” of rice did so for a business. Rice can go bad if not used in a timely manner (on the order of months, not years).
@Orv: It’s a little bit responsible; the loss of cheap corn as food drives people to other cheap grains, such as rice, which drives up demand and cost for rice. If cheap food corn re-entered the market, the price of rice would go down because people would shift purchasing to cheap corn until prices stabilized.
@PlanetExpressdelivery: from the full article:
500 lbs of rice for one’s own consumption. Good luck keeping the weevils out. Maybe there needs to be a new blog called The Survivorist. . .
Guess what–I just registered the domain name! [survivorist.com] What do you do with a domain?
@ThinkerTDM: Don’t forget, though, that European gas prices are also higher because the US government gives out billions of dollars in tax breaks to American oil companies.
Exxon, for example (and this is 2004 data, so recent numbers are probably somewhat different; I would argue more rather than less iniquitous) paid about $30 billion in taxes, but received anywhere between $1 and $4 billion in tax breaks. And that doesn’t count the reduced oil and gas leases they pay on US mining/drilling assets. If they had to recoup those costs, I’d bet US gas prices would go up pretty quick.
I’m not sure what “rights” you’re defending by demanding cheap gasoline, or how taxing it amounts to “getting it up the ass.” Perhaps you prefer the way Exxon treats you?
@snidelywhiplash:
Yes, sugar is technically priced correctly. It’s definitely not at the price it would be without government interference but it’s priced correctly in that a “skewed” supply does meet demand and the end result is a price the market is willing to bear. Government intervention does prop up the price, but pricing is ultimately a product of what people are willing to pay due to a “skewed” supply. My argument is to the first poster which drew numerous other people to respond.
@lockers: Raising prices on items in short supply is not in itself gouging. It’s called supply and demand.
Anti-gouging laws are primarily to prevent companies from taking advantage of people in the even of natural disasters, etc.
@ThinkerTDM: I agree – I think consumerists need to unionize and en force make the price of gas drop in the US. Also, we should boycott the airline industry until they become user friendly again. Now, if only we could unionize and do something about our pathetic effed up government . . . .
>>In the NY Sun article gently referenced in this thread, a person purchased what amounts to about a three year supply of rice for a single person eating a half pound of rice a day.<<
Show me a man who eats 1/2 pound of rice a day and I’ll show a man who ain’t very regular if you know what I mean!
@snidelywhiplash: this i find hilarious since we’ve basically replaced the sugar in everything with high fructose corn syrup. something that is not nearly as tasty or sweet in my opinion.
maybe we should actually go back to using sugar so the farmers can afford to produce corn for food and ethanol.
@ChuckECheese:
I think C&H means California & Hawaiian Sugar.
because my family is from immigrants from china, they eat rice everyday. me, i dont care for it much. anyhow, chinatown (in oakland, at least) more than doubled the price of their rice since the shortage. so considering costco isnt doubling their prices, i believe its a good thing that they are limiting the purchases.
anyhow, rice seems like its hard to find right now. i dont know personally, bc im not a fan of it.. but hey.. share
@BugMeNot2: You’re right about the colon-pack, but a half-pound of rice is still only about 800 calories. We might want to hoard something else with more calories.
@Greasy Thumb Guzik: Guz, I was j/k about the Cuban thing.
@hejustlaughs:
Not to mention that closest thing to a true free market is in foodstuffs.
Just as an FYI, Costco is one of the cheapest, but not the cheapest, place to buy rice. That honor goes to restaurant supply stores, who are literally 50% less than Costco.
Hey guys, please don’t compare Costco to Sam’s Club. Costco is a company that offers living wages and decent health benefits to its workers. It does this despite ongoing pressures from its stockholders to cut employee benefits to enhance profits.
Sam’s Club, on the other hand, is owned by Wal-Mart. Rice-rationing or not, guess which company I’ll continue to support?
@ChuckECheese: I don’t see where anyone tries (or even talks about) buying a three year supply. I don’t think I missed it; I read the article pretty carefully. One person attempts to buy two bags but that is not even close to a three year supply.
Phew…glad I picked up 70 lbs of rice two weeks ago at Sam’s Club before things got too messy. And a 20 lb bag of Basamati at Sam’s was half the price of what is noted above for Costco. Crazy.
Hmmm… $20 says that is the Sunnyvale Costco. I fear that Costco- I’ve never been hit with people’s shopping carts as much anywhere else. Navigating a shopping cart in there is a lot like driving in Sunnyvale or Cupertino.
my sister bought 20 bags of rice.. i dont know how big they are but she got it from costco last week. she got it before the rationing, and no shes not going to eat all of it herself. we have a lot of friends and family who dont have a car to pick up a 50 lb bag of rice to take home on the bus, so my sister bought alot. i dont know which costco she bought it from, but its in the bay area. if they are talking about someone buying 3 years worth of rice, it could possibly be my sister.
@ThinkerTDM – How exactly have you, or Americans, been “standing up” to fight the rise of gas prices?
The market and environmental conditions have created the “perfect storm” at the grocery store. Most Americans have never truly experienced life without food as we have so many safety nets in this country. Even those however are quickly depleting themselves. Horde a bag of rice and flour? Absolutely. Having written about food prices for years, I think we’re in for a tough summer. I do think limiting like Costco has done creates a sense of scarcity and folks will be apt to hit the panic button. Even conservative food economists believe we’re several years from fixing this mess.