Consumerist
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.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.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.
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."The Wall Street Journal, that towel of smiles, boils down the essentials of surviving rising food prices and a Soviet/Sino attack:"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.
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)
Comments
My grocery list is reflecting this image. Since I've commited to buying only organic meat yet can no longer afford to eat it daily because of rising food prices and the ever growing chunk of my budget dedicated to buying gas for my car to commute to work (and don't diss my car- it gets 31 mpg), I've been eating a hell of a lot more vegetarian meals lately. Bring on the spinich ravioli.... noodles with peanut sauce... and refried bean/cheese quesadillas.
ha, the new 'image' thing is messing with my mind. I meant "...reflecting this trend..." of course.
I have ALWAYS stocked up on non-perishables because my mom did the same. She had a huge pantry, why not fill it with soups and pasta when they were on sale? She jokes that if nuclear war came, she would survive because she has oodles of food in her house.
as long as coors light and peanut butter and jelly stay in stock, im fine.
Question: wouldn't everyone stockpiling food exacerbate the problem?
My grocery bills have gone through the roof, but it's not primarily grains that have increased (nor have I seen a shortage); it's meat. I'm already screwed because I keep Kosher; the prices of Kosher meat is soaring lately.
Milk? We're paying about the same today as we were paying last year, around two to three bucks a gallon, depending on sales. I've heard stories about $4 milk but I haven't seen it yet.
I always keep a good supply of canned foods on-hand anyway; good in emergencies and when we don't use them we give them to food pantries. I'm not sure that I need to start stocking up on it yet, as I haven't seen any shortages or huge spikes in prices of those items yet.
I've made the shift away from organic. Was trying to live the healthier "green" lifestyle as well, but all I've ended up doing is going back to farm raised. $1/lb for chicken of unknown origin or +3$/lb for free range? .. Give me a break, I'm going to go cheaper to feed my family even if it means backing out of the Earth centric attitude I've tried to adhere to.
@sponica: Hah, my mom too. My friends called our laundry room "the bomb shelter."
@ceejeemcbeegee: Only in the short term. Then in the mid term, prices will drop because much of the demand from then is being met now. Then everything should even out.
Everyone should simply move away from urban areas where land is cheap, buy themselves several chickens, a cow, a couple goats (for company) and then plant a 2 acre garden using heirloom seeds so that the plants reproduce. We can live off the fat of the land, and guarantee ourselves that our food is organic.
Or, we could genetically modify chickens so that they are beakless, massive chested, and grow rapidly. Pump in some chemicals to make them even tastier, and the capacity to lay ten eggs a day, and problem solved.
These are the only two solutions to our catastrophic food shortage.
Aside: are double-cheeseburgers still $1.00 at McDonalds?
The cheeseburgers still are here in Missouri, depending on where you go.
@humphrmi: Will you send me some $2 per gallon milk? All I can find is $3.98 milk this afternoon.
Americans still pay comparably less for food than most other countries. Here in Ontario, Canada, for example, milk has been well over $4 per gallon (4 liters) for more than a couple of years, and you're lucky if you can get the "chicken of unknown origin" for $3/lb (thighs/drumsticks). The only thing that appears cheaper is cereal, though I only have Florida as a comparison. McDonald's and other fast food is still about 40% more expensive even though our currency is about equal.
I've said it before and I'll say it again: Aldi is your best friend (or another generic/clearance grocer in your area).
I can buy about 80% of my groceries there for half the money I spend at, say, Dominick's. Trying out their off-brand products can be hit (chicken patties) or miss (pizza rolls), but it's hard to mess up generic canned goods, cereal, and dairy.
As for milk, I keep an eye out on the quantity discount sales, where 2 gallons are about 40% off. My family can go through it fast enough to make it worth my while.
Oh, speaking of pizza rolls, I've stopped buying stuff like that. It's expensive and bad for me anyways.
@FF_Mac: I keep hearing about near-$4 milk, where are you geographically? I buy mine a a Jewel (AKA Albertsons) in Skokie, IL and I haven't paid more than $3, and every couple weeks they put it on sale for $2, limit 2.
rearranging deckchairs on the titanic...
doesn't matter what I do, she's gonna keep on sinking...
rearranging deckchairs on the titanic...
I realize now, my time was better spent drinking...
I remember one commenter saying, "Actually, buying more would do the opposite and make the cost go up since it would now be in even greater demand." That makes perfect sense, if only consumers had that sense as well.
I think the retailers are rationing just to get more people into the store. They could just raise their prices and that would be an efficient way at controlling the supply. But by rationing and stirring up the hype, you'll get a lot more traffic into your stores since people will be in a panic.
@humphrmi: Your grocery must be keeping cows in the back, munching on the discarded produce. It fluctuates right around $4 a gal here, about $2.30 for a half-gal, at Wal-Mart ($3 for 1/2 gal of organic). At the local Albertoid's, it's about $5/gal, and $3 for a half-gal. They charge $4.50 for a half-gal of organic milk.
This is just crack to up profits. Screw it. If it gets bad enough, I'll just eat more from my garden or make it bigger.
I know that, for some people, this is a controversial thing to say, but promoting Ethanol as an alternative fuel is one of the worst things that has happened to the American people in recent years. What you have is thousands of farmers switching over to corn for simply selling it to be converted to the fuel (which is more expensive and less fuel efficient than gasoline, BTW). So even though you have many, many corn growers, prices have gone up because incredible amounts are being used for non-food products. Then, you have wheat, grain, and other farmers who have changed over to corn for Ethanol, so prices of those products have gone up as well.
Ethanol is a terrible solution to our dependence on over-seas oil. I would argue that, in a "two-situation" scenario, we're better off relying on Middle East oil than promoting/giving incentives for producing our own ethanol.
@ceejeemcbeegee:
Temporarily, yes, but eventually when hardly anyone is actually buying during times of low supply, it would smooth things out.
@karmaghost:
Yeah, it is kind of a half-assed solution when you're still wasting most of the plant.
According to this:
[money.cnn.com]
Milk prices are going to moderate or even go down somewhat this year.
*loads shotgun*
Shhhh, I'm hunting wabbit.
@Manok: Guess you missed the hops shortage huh?
Beer is set to rise significantly in the next 2 years due to a terrible crop the last two years.
Well wheat futures are crazy at the moment, we should be feeling that sometime this summer. There was a run on butter in Japan, so i wonder when that will hit us. This is definately dark times indeed, at least foreboading.
@deedrit: It is once again safe to eat the squirrels:
[www.nydailynews.com]
I wonder if all of this scare-mongering isn't a slick way of stimulating the economy at a time when people are trying to cut back on consumption. You can't get them to run out and buy new cars, computers, or iPods, but you can frighten them into buying tons of food they will likely end up throwing away when it all blows over.
Also, the writer of one of Wall Street Journal article is an investor in Quaker (maker of such products as Quaker Oats).
@nyaz:
As an Economics major, I have to say LOL - If it ends up being a global run on butter, then global spending on guns will decrease, and we'll have fewer wars.
@nyaz:
The funny thing is that the "run on butter" in Japan hasn't troubled anyone much at all. Most people don't care and just eat margarine. Americans are panicking much harder because they aren't used to higher food prices like other developed countries.
@ShariC: @humphrmi: But unsafe to make margaritas?
We don't consume much in the way of wheat due to a member of the family (me) having Celiac disease. I cook, so if I don't eat it, I probably don't make it. I buy PopTarts and occasionally breakfast cereal once in a while for the kids, but that's pretty much it.
When I went to the Korean market yesterday to buy rice in bulk, the counter guy told me that they were limiting the rice bags to 2-20 pound bags per person. They were nearly out on a day that they should have had stacks and stacks.
I didn't care because even though we almost certainly eat more rice than the average family, it takes a while to go through 40 pounds and all this silliness should be over by then.
Then I noticed something odd: while the 20 and 50 pound bags were gone or down to a very few, the 1, 2, & 5 pound bags were stocked on the shelves.
People have been reading the news, seeing the story we've all seen about the Costco in Mountainview, CA running out of bulk rice, deciding that they need bulk rice, are driving to the store to buy it, and are avoiding smaller packages. Why? Because they think they need bulk rice because the paper says so, not because they actually "need" rice at all.
The same thing had happened at the grocery store later. Large bags gone, small bags were just sitting there.
As for our eating/buying habits, they haven't really changed at all because pretty much everything is already from scratch because of the Celiac. I am trying to get more from Costco, but that's because the Costco is new to our area. I buy the same stuff in the same amounts.
I know for my non-Celiac friends, they are eating out less, baking some more (as much as work allows), and buying less junky stuff.
We are buying our food like normal. We've been trying to eat healthier, so our food costs have modestly increased, but on the regular things we buy, it seems just about the same. I only purchase things when they are on sale, I'll hit up Sam's Club once in a while, and I go to the local market for meat and produce. Like normal.
I feel like I'm the only person I know who lives well below her means, and therefore doesn't feel the crunch like everyone else.
It seems an awful lot like this is a scare tactic to stimulate the economy, but it is an absolutely true thing to say that ethanol is one of the worst things to happen to the American people. Not just in it lower efficiency/lower energy content, but in terms of feeding our food to cars. The global per capita irrigated cropland is something like .57 acres, and yet to grow the corn needed to fuel an SUV for a year would take something like 11 acres. (Gunkel, Darrin. "Ethanol can replace gasoline". Current Controversies: Alternative Energy Sources). Add to that the growing world population and you have a lot of hungry people.
Well, i live with my parents (I'm 19) and they do all the food shopping.
They come home with 100 calorie snack packages and regular sized cereal boxes and small meats. Everything is small and expensive.
I BEG them to go to an ALDI or a BULK store to buy everything. I've done the math, and it's clear, there is no denying that bulk is better. i have showed them they can cut their monthly food bill in half. But my mom is afraid to buy large food because "they go stale"....buy some premium airtight containers and they will pay for themselves.
I give 80% of my paychecks to my parents to help out. But i think i am going to stop giving them money if they insist on wasting it.
What the hell is a 'run on butter?' Is it like a run-on sentence? C'mon now, lets be serious folks, settle down.
Am I the only one who thinks that the root of all these problems is that there are simply too many people in the world, growing at an exponentially quicker rate? Surely there has been some studies somewhere that evaluates what the threshold of human population is before this planet's resources simply cannot sustain it. Are we at that threshold? Even if so, I don't think you'll ever hear any politician or policy makers stand up and say "Hey, people. How 'bout you stop having so many kids?" Instead, they'll regulate the oil and subsidize the food supply until they are blue in the face. I'm not saying we should start putting birth control in the tap water or anything... but... can't we start putting birth control in the tap water or something?
@LastVigilante: well, i'm not planning on having kids, so i'm doing my part. :)
i made the decision a few months ago to become a vegetarian (i still eat fish occasionally). this was mostly for environmental reasons, but it's amazing how much money you save when you don't buy or eat meat anymore.
I smell conspiracy by Walmart.
See, I was going to spend my Uncle George check on a good hooker and maybe a new 8 track player. 8 Track players are not sold at Walmart and hookes can't get their Meth at Walmart so Walmart was going to have little to gain from my Uncle George check.
So Walmart stated talking bad economy in hopes that I would realize the evil ways I was going to spend the Uncle George check and would want to spend my $ on a new big screen TV.
But that didn't work.
All that bad economy talk got me thinking that I should SAVE my Uncle George check.
Well that sure as hades wasn't going to stimulate any of my body parts and it sure wasn't going to do much for anybody but the local bank.
And Walmart doesn't get to do banking.
Now we got this talk about food. I gotta have food. Maybe I will spend my Uncle George check on food.
And Walmart wins because it is the only F***** grocery store near me.
How is there a shortage? It's hard to believe the people of china can pay as much for their bags of flour and rice as Americans. In a time of shortage, those paying less should be hurt first. So I take it this shortage is purely from stores hording, so it is purely artificial?
these days, I just want to buy a handgun and end it all. were the richest country in the world and we have 4 dollar gas and fake food shortages.
@humphrmi: I'm in St. Louis, $3.88 for a gal of 2%.
@marsneedsrabbits: Yeah, another fellow Celiac here. I haven't had trouble finding rice yet (although I'm still working on a giant bag of it) My problem has been with the rising costs of the gluten free food. It was expensive enough to tree and live a normal gluten free life style. Now its getting plain rediculous. I pay $6 for a 10oz box of Brown Rice Cereal. I could go straight rice, meat, fruits, and veggies but thats starting to creep up here too.
Ruby Tuesday's noticed a drop-off in sales NOT because of the economy but because they've changed their menu and totally overpriced their food. It shouldn't cost $50+ for food only for two people at a chain restaurant like that. Add in drinks and I'm up to $75 there. For $75, I can have a MUCH more enjoyable meal at a good steakhouse and get real food, real service.
@FLConsumer:
Them steakhouse prices are going to go up as well.
1) Because RT went up.
2) The cost of gas/electric to operate the business is going up.
3) Them there steaks don't walk themselves to the steakhouse.
4) The cost of beef is going to go up because of the diversion of corn to ethanol.
@LastVigilante:
I had to read this before I went to bed. This made my day. I think around the same lines. Seeing people with 8 kids makes me sick and my cynical side jumps right to where you were headed.