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As Gas Prices Go Down, So Will Food, Right? No

msnbc.msn.com — As prices for crude oil and other commodities ease, Americans have gotten a small dose of relief at the gas pump. But don't expect less pain at the grocery counter.Food inflation is to stay — and will probably get worse for some things.That's because retail prices for cereal, eggs, cheese and meat generally lag by several months

Who dugg this? Made popular Aug 22, 2008

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  • lestyoubejudged, on 08/22/2008, -0/+54I love how prices lag on the recovery but never on the initial rise in prices.
  • inactive, on 08/22/2008, -8/+40STOP ETHANOL!
  • wrathchilde, on 08/22/2008, -3/+29Food prices do not go down.
    When living in Hawaii, I noticed it was $6.50 for a box of Rice Crispies. Naturally, I feel like, WTF? So, they explain that it is because of the shipping cost. O'RLY? Then how come my brother can buy a box at Safeway in Seatlle, slap $1.50 in stamps on it, and get it to me for less than $6.50? Do they FedEx overnight each box? Or, does it cost about $0.04 for each box in a huge-ass container on a ship? Why do they charge what they do? Because they can.
  • inactive, on 08/21/2008, -4/+24Food inflation hasn't really it yet. Consider that fossil fuels account for 80% of the cost of fertilizer and the increased cost form the energy shock are just beginning to trickle down to the level of production. The next round of crops planted, grain fed to livestock et. will reflect the current market price of energy. sorry for the bad news.
  • trickyt, on 08/22/2008, -1/+18Actually at my store lots of things cost the same. You just have to have a good memory to realize that your cereal now comes in 12oz packages instead of 13.5oz ones.
  • scabbers, on 08/22/2008, -0/+17Try passing on the extra costs to your employer by asking for a raise, and see how well that goes.
  • lostsymphonies1, on 08/22/2008, -0/+13It's all relative. Would you rather pay $4.50 or $3.50? I would love to be paying $3.50 for gas right now
  • LilRabbitFooFoo, on 08/22/2008, -5/+18Stop ethanol.

    Go solar.

    Skip the middle man. :)
  • gvetterick, on 08/22/2008, -0/+12The floods in the midwest didn't help, either. Prices are going to be up for a while
  • cadmiumpaint, on 08/22/2008, -2/+14Last month gas prices were "insane". this month they are still "ridiculous". The cheapest gas in my area is around $3.98. Thats not relief, its just a softer, gentler rape.

    you put gas prices under 2 bux a gallon, then we can talk relief OR you can increase my paycheck to account for all my bills going up.
  • bigstinky, on 08/22/2008, -0/+10I have to respectfully disagree with you in small part cdoxie. I am a chef and right now I am paying 14% more for the same product I purchased at this time last year, 21% more than 2 years ago.It has hit, and it has hit hard and fast. You do have a point though. I have read reports that predict an average of 7 to 10 % increase in food cost over the next few years exponentially and it is directly influenced by the cost of fuel- especially diesel fuel. Whether it be due to transporting the food or the use of farms for growing corn for bio fuel (over growing food stuff itself) Either way, we are screwed.
  • dfsiii, on 08/22/2008, -0/+10Also note that big chemical companies like Dow, BASF, and DuPont have raised their prices to account for the rising prices for crude and natural gas. These are the people who make the raw components for food and packaging - sometimes two steps removed from the end-product-producer. With prices up around 30-40% across the board in some sectors... those costs will be pushed down the chain to the consumer over time. Not big, bad, evil corporation in this case, but companies needing to protect their already razor-thin margins in the low-end basic chemicals market as feedstock prices go through the roof.
  • PinkFloyd2003, on 08/22/2008, -0/+9That's actually a really interesting point. Especially when something like FedEx overnight shipping costs would typically be the most expensive means of delivering something as opposed if you are shipping something in bulk to a grocery store where the price of shipping should be drastically less per item.
  • trickyt, on 08/22/2008, -2/+11Relatively stable? Again, wtf are you smoking?

    No one has any idea what gas will cost in 3-6 months much less a year or two. It's not stable if you can't plan on it.
  • kinerry, on 08/22/2008, -2/+9It's called cellulosic ethanol, you goddamn uninformed hippie
  • angryfirelord, on 08/22/2008, -0/+7We need more switchgrass and hemp (if it gets legalized).
  • sdphost, on 08/22/2008, -0/+6Actually that's a misconception it actually mostly comes from dead planktons.
  • nthpro, on 08/22/2008, -0/+6Not in Alaska where some of the nations gas comes from. We are still paying 4.38 a gallon. And the main refinery up here announced today that it has operational issues so prices are expected to go up. Ouch.
  • LordSteven, on 08/22/2008, -0/+5More like if you want gas prices to go down have the Fed crank interest rates way up and get Congress to stop with the 1/2 trillion dollar deficits.
  • Vandango, on 08/22/2008, -1/+6Did none of you take economics? They'd sell a can of Coke for $100 dollars if you'd buy it. Who cares what it cost to make. If you want prices to go down, stop buying it and lower demand. It's really that simple. Gas prices have gotten hammered in the last month because demand dropped by 800k barrels a day. People realized that they didn't "need" to drive anymore and figured out other ways to get around.
  • Devrdander, on 08/22/2008, -1/+6You started driving ~10 years ago? and you are already retired?
  • heymike, on 08/22/2008, -2/+7I don't think you guys are in recovery yet, still on the way down imho. This is not solely due to inflation either, ethanol subsidies are a factor.
  • TheXuu, on 08/22/2008, -0/+5i hasn't goodly get what say by you?
  • xptoast, on 08/22/2008, -0/+5Picking a politician these days is like choosing which STDs you would like to pick up at the voting booth.
  • sarixe, on 08/22/2008, -0/+4nor a republican.
  • inactive, on 08/22/2008, -0/+4what?
  • deff, on 08/22/2008, -0/+3Tried it. Got the run-around, despite record profits this year. *****, I need a new job.
  • johndavidjack, on 08/22/2008, -0/+3Yeah, so did having a Democratic Congress, who promised us out of Iraq, and promised to lower prices.

  • inactive, on 08/22/2008, -1/+4Oil futures traders seem to have some idea what it will cost, otherwise they wouldn't have dumped all their shares at $150/bbl.
  • SDM187, on 08/22/2008, -0/+3The price of oil shot up $6 today day... we're not even close to being out of the woods yet. additionally, this may be around the cheapest it EVER is again.
  • Khast, on 08/22/2008, -1/+4I'd rather pay $3.50...however where I live it is $4.63/gallon. And that is in Washington State.
  • inactive, on 08/22/2008, -1/+4thanks for your post - reality

  • TheXuu, on 08/22/2008, -0/+3funny, i keep getting redirected to why-your-blog-is-a-joke.com
  • maximilen, on 08/22/2008, -1/+4Gas won't keep going down in the long run :( Sorry lifted-F250-driving-dude.
  • DaviDTC, on 08/22/2008, -2/+5+$2 Just last week.
  • lestyoubejudged, on 08/22/2008, -1/+3Oh I agree, there is no way we are in recovery.
  • coreyb, on 08/22/2008, -0/+2$3.50... we are still paying up to $4.33 a gallon. A 20 mile commute is breaking us here.
  • WhoWatches, on 08/22/2008, -1/+3Capital is a lot like water and flows to the lowest point. Some of what you see happening is a workforce that has been globalized causing fuel, currency and production to reach a "sea level". Most of us in the world could easily see a return to a pre-industrial era of peasant living, managing to sustain ourselves on what the local area can sustain.

    The rich and elite will become the new kings and lords and we will work their land and pay them tribute. That has been the norm through-out history, the great experiment of liberty and free markets has failed because as a people we have let it. Instead we revert back to proping up despots and dictators who abuse us and take all of the wealth.

    Or, we could revolt and just kill them all.
  • ExOrienteLux, on 08/22/2008, -0/+2The high cost of shipping to Hawai'i is because Matson has a monopoly on shipping. There is a regulation (Jones Act) that only American ships can ship from American ports to American ports. Most shipping companies are foreign owned. Therefore Matson over charges on shipping besides the fact that most of the ships going back are empty so we pay double in shipping.

    This explains why a Japanese car is more expensive in Hawai'i than on the mainland. They have to be shipped to the West Coast first then shipped to Hawai'i!

    The politicians could at least exempt Hawai'i but Matson and it's owner Alexander and Baldwin donate to so many of the politicians, esp. the Hawaiian politicians.
  • akchrs, on 08/22/2008, -0/+24.46 a gallon in Juneau
  • sup4141, on 08/22/2008, -2/+4I can think of 2 reasons to stop ethanol.

    1. Fertilizer runoff into the Gulf of Mexico.
    2. It is less efficient than gasoline so you will probably end up paying more.
  • Spartycus, on 08/22/2008, -0/+2But can it crush cars?
  • ThE0eNiGmA, on 08/22/2008, -0/+23.13 in at a couple of gas stations in NJ. At least SOMETHING is cheap here.
  • TheXuu, on 08/22/2008, -0/+2http://xkcd.com/437/ ?
  • rkzda, on 08/22/2008, -1/+3Thank you. I will continue to use E85 in my Ranger as long as it is cheaper for me to run than gas.
  • sarixe, on 08/22/2008, -1/+3"you guys"? who the hell are you?
  • tim620, on 08/22/2008, -0/+2@sup4141

    Good points. I have personally tested 10% ethanol blend against premium gasoline and yes, you are right, the ethanol is less efficient, but the price difference puts about the same cost per mile. Unfortunately, you are also right about the fertilizer runoff. However the runoff will happen with or without ethanol. Ethanol has not increased corn production that much, even if it did, fertilizer is used for other crops as well, so almost all non-organic farmland produces some runoff.
  • sarixe, on 08/22/2008, -0/+2I envy the person who has the money to say "I'm going to buy a Ford F-250, and be able to pay for gas!"

    Although, I really don't need that kind of power.
  • tim620, on 08/22/2008, -0/+2I think solar is a great idea, but I'm also not opposed to ethanol, and here is why:

    1. The corn used to produce ethanol is NOT human grade corn (yes, there a number of different types of corn). It is meant for animals, like cattle, to consume.

    2. In the process of ethanol creation, a high protein "mash" is created as a byproduct, which is fed to cattle. So there is very little waste of corn. In other words, you can't even blame the high price of meat on ethanol.

    3. Even if it were human grade corn, there is such a small percentage of American corn that is currently used for ethanol production that it wouldn't make a dent in the prices.

    That being said, I can see no reason to stop ethanol.
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