This week saw major retailers restricting commodity sales as supply lines crumpled in the face of rising demand. The Chicago Tribune warns that bakers are running low on rye flour, and the Wall Street Journal suggests “it’s time for Americans to start stockpiling food.” So what the hell is going on and how does it affect you?
The week of rationing was caused by demographics ganging up with bad public policy. China and India, with their billion-strong populations, want to eat real food, boosting demand just as supplies are diminishing. Tack on the price of oil, rising like a lost balloon, coupled with the government-induced ethanol high our farmers are enjoying, and you have yourself a mess.
The market processed all this data last week and had itself a conniption. Not “the market” as comprised of Lamborghini-driving Wall Street types, but the purer market made up of individuals acting to protect their economic interests.
Commercial bakers say they are stocking up on specialty rye and gluten flour because of fear that supplies are dwindling. And Costco’s chief executive said the big-box retailer is thinking twice about letting customers buy multiple pallets of flour to preserve supplies.Restaurants and other large-scale customers appear to be buying so much rice that Costco, Sam’s Club and other wholesalers have put limits on the amounts they sell, leading some consumers to stock up. This has resulted in some individual stores in places like California reportedly running out of rice.
This isn’t Joe consumer doing the stockpiling, unless Joe consumer owns a bakery and an Indian restaurant. People are looking at supply chains and prices and independently determining that now is the time to stockpile because things are going to get worse, not better.
So what should you do? The New York Times offers anecdotal proof that you already know how to react:
Burt Flickinger, a longtime retail consultant, said the last time he saw such significant changes in consumer buying patterns was the late 1970s, when runaway inflation prompted Americans to “switch from red meat to pork to poultry to pasta — then to peanut butter and jelly.”“It hasn’t gotten to human food mixed with pet food yet,” he said, “but it is certainly headed in that direction.”
[...]
Wal-Mart Stores reports stronger-than-usual sales of peanut butter and spaghetti, while restaurants like Domino’s Pizza and Ruby Tuesday have suffered a falloff in orders, suggesting that many Americans are sticking to low-cost home-cooked meals.
Over the last year, purchases of brand name cookies and crackers have fallen, according to Information Resources, which tracks retail sales.
The Wall Street Journal, that towel of smiles, boils down the essentials of surviving rising food prices and a Soviet/Sino attack:
You can’t easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.
Have you changed your buying patterns yet? Tell us in the comments.
What’s going on with rice and flour? [Chicago Tribune]
Load Up the Pantry [WSJ]
Recession Diet Just One Way to Tighten Belt [NYT]
(AP Photo Antonio Romero)
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@Falconfire: where do they grow beer??
@Tank: Beer is grown in beer gardens.
@ShariC: Yeah margerine that’s heathly for you.
The whole thing is a fraud!
Re; Ethanol and its total inefficiency. Remember one thing: ANYTHING the government touches gets screwed up. Look at what happened to education (it’s deplorable in the public schools)… look at medical care cost (driven up my the government’s intrusion into Medicare and Medicaid)…Anything and everything that the government gets involved in becomes a train wreck.
@dakotad555:
Wrong.
Specialization and economies of scale are the only ways to drive food prices lower. There are nearly 7 billion humans on Earth; you’re going to need to feed an awful lot of people. Buying “cheap land” in the MidWest is a nonstarter. In America, you either don’t have money to purchase land and float debt that’s cheaper than food or you’re not really complaining about this.
@kable2: You may have a point, but man I love a good glass of chemicals, blood, and puss with a big ol’ piece of chocolate cake with chocolate icing.
And FYI it does a body good. I heard that on TV.
@jamar0303: Where is soy milk cheaper? Can someone tell me?
I just had a friend say the same thing…I get 2 GALLONS of milk at Costco for about $5.50, is there soy that is cheaper? I’m all for it. Tell me where!!!! Tell me where!!!
ChuckECheese: That was great.
@humphrmi: A gallon of milk at a regular grocery store in the LA area, easily over $4.00, not sure HOW much since I buy milk at costco now…
@Rode2008: Uh, I went to public school in MN and it was pretty far from deplorable. Where I grew up there were no private schools, save for religous oriented schools, which always astounds my raised in the big city friends. There was no need for private schools because the public ones were quite good.
Saying anything and everything the government gets involved in is a train wreck is kind of oversimplifying it don’t you think?
@humphrmi: Kosher meat prices have been soaring? That’s news to me. They’ve gone up a bit, but nothing like gefilte fish has.
Time to befriend a Mormon. But check their “end of the world” closet first.
Most of us are obese anyhow. A food shortage might do us some good!
Pasta and Beer. Two of my favorite things.
Great. And if you are on a restricted diet where you can’t eat rice, grains, and general starchy carbs, then you’re screwed.
Food and gas prices have changed my buying habits. I used to drive 10 miles each way to the discounted grocery store to pick up food, now I just walk to the grocery store behind me because now it is much cheaper overall for me to use that store.
Also, I’ve only been walking the perimeter of the grocery store to get my groceries, since that’s where all the staples are. The only time I really venture into the middle aisles is when I need a basic item like flour, peanut butter, etc…
@marsneedsrabbits: I should go check the bulk food bins at my nearby organic grocery store to see if all the rice is gone now.
I still have a 5lb can of the stuff and by the time I run out this should have blown over.
I don’t know where all you vegetarians are shopping, but my girlfriend of 3 years has been a vegetarian since she was 12 and her food costs 50% more than mine.
Compare a box of Boca Burgers to a box of Turkey Burgers, at cost per lb. How about green peppers at $3/lb compared to chicken thighs at $.99/lb? Milk for $3/gal vs Soy milk for $5/gal?
I mean, yes you absolutely need vegetables in your diet but meat is not that expensive where I live. Soy based proteins are much more expensive.
@wallapuctus: I totally agree with your assessment of food costs. The funny thing, this wasn’t the case just a few short years ago. I call it the Whole Foods-ization of staples and vegetables. In 2001, I could get kale for 59¢ a bunch, beets for 79¢ a bunch, turnips for 39¢ a pound, flour for 25¢/lb. Prices at the health food stores were higher, but still reasonable. I remember despising having to pay more than 79¢ for a red bell pepper.
Then Whole Foods gained steam. They started jacking up their prices in 2002 and 03. Before long, they, and other health food stores were charging near-current prices, such as 89¢/lb for flour, $4.99/lb for red bell peppers (which comes to about $2.50 each), and $1.99 a bunch for kale and collards.
What was more annoying was that I didn’t live in a city with a WF, but my local, dingy, poorly stocked and managed health food stores started charging the same prices. So I quit the overpriced health food boutiques and shopped at regular groceries. Then they started raising their prices until they were roughly comparable to WF prices. Wal-Mart in my city now charges $1.10 a lb for onions, 69¢/lb for bananas, $1.87 for a red bell pepper, and $1.59/bunch for greens (when they have them). Celery is $1.50/bunch, and carrots about 69¢/lb. As recently as 2005 I would freak when potatoes cost more than 75¢/lb at the health food store, but now they’re 90¢/lb at Wal-Mart.
The gist of this is that not so long ago, there were nearly no vegetable foods that cost as much per serving as meat, but now many veggies do, more so if you consume organic. These days I shop at ethnic groceries, where for some reason, they are still able to charge only 1/2 to 2/3 the Wal-Mart price for veggies.
“Now, as for food – the following breeds of dog are edible…”
-Homer
@ChuckECheese: “ethnic grocery” = “employing my twelve cousins who are here illegally and will work for soup and bread”.
I have started going to the Escondido swap meet every weekend. They don’t have meat (well, they do, but I wouldn’t buy it there really), but they have tons and tons of stalls just waiting for people to come and buy stuff. You can get INSANE deals if you are nice and/or barter. Remember, they have to get rid of the stuff they bring because they have to pack it back up when they leave and it will go bad anyway!
So really, you have the upper hand at swap meet produce. Last time I went there, I spent about $10 total and came out with lbs and lbs of food. I also bought a few plants for fresh cilantro and what not.
Maybe next time I go I’ll write down some of the prices and share them with you guys so I can further convince you that going to the swap meet is the best idea these days.
@bohemian:
That’s funny. I noticed that lamb is now much cheaper and have been eating more of it.
@RandomHookup: Yeah I guess it’s possible that some of these places hire illegals. There are Asian (Korean and Vietnamese mostly) and Mexican groceries here in El Paso, with produce that is usually about 1/2 of the price of Wal-Mart’s.
@ChuckECheese: If nothing else, I’m sure lots are family run, which means they don’t have to pay as much for the help.
@Eyebrows McGee:
It’s like being back in Ethics class. Great read, a bit long reply but worth it. Very fascinating.