Commodity/Food Prices Hitting Even "Recession-Proof" Foods - Pizza, Hot Dogs, Bagels - MSNBC

[hatrack]

If you’re looking for a sure sign the U.S. economy is headed in the wrong direction, all you need to do is look at the skyrocketing price of “recession-proof” foods: pizza, hot dogs, bagels and beer.

For many Americans, the credit crunch and the mortgage mess have left their pocketbooks – and their cupboards – bare. These same consumers, many living paycheck to paycheck, have relied on these cheaper foods to keep their expenditures down. Not anymore.

EDIT

* Pizza makers have seen their cheese costs soar this year from $1.30 a pound to $1.76 a pound. Even worse, the flour used to make the dough has gone from $3-$7 dollars a bushel to $25 a bushel in less than a year.
* Beer makers have been forced to raise their prices because of the skyrocketing price of hops – one of the principle ingredients. The price of hops has gone from about $4 a pound in September to $40 a pound. The price of barley, beer’s other main ingredient, has nearly doubled.
* Bagel shops have struggled to hold the line on prices and keep their customers. The exploding wheat prices have made the $1 bagel a fact of life in big cities such as New York. Donuts are averaging $1.50. And many shop owners fear a wheat shortage will drive prices even higher.
* Even the lowly hot dog is getting more expensive. Gray’s Papaya, a New York hot dog institution, will be jacking up the price for its $3.50 “Recession Special” – two hot dogs and a 14-ounce drink. Nicholas Gray, owner of the frankfurter chain, has yet to set the price increase, but he indicated it is coming soon.

EDIT

http://www.msnbc.msn.com/id/23415510/

[Delphinus]

1. I was at a restaurant the other night

and the waitress mentioned their beer had gone up. I had not realized the price jump from $4 to $40! What's the explanation of such an increase in, what, less than six months?!

[napi21]

3. My guess is that many farmers have changed from growing hops

to growing wheat to support the increased ethanol production. I know that was the reason wheat prices have gone up. Instead of wheat production going toward food products, it's going to make ethanol.

[phantom power]

4. The real reason: automobiles like their ethanol with hops too.

Few people know that.

[amandabeech]

8. In the U.S., ethanol is much more often made from corn, which has gone up in price.

Corn has been used to feed poultry, hogs and beef. Since corn is so expensive, some beef feedlots have switched to wheat, driving up the price of wheat.

Also driving up wheat prices all over have been a series of bad harvests in Australia, a major wheat exporter, as a result of long term drought. That drought seems to be easing and Australia is expecting a much better crop this year. Last year, western Canada had unfavorable weather, and was unable to export the usual huge crop.

World grain stocks are as low as they have been for 20-30 years right now, and supplies are tight everywhere. What we need is a series of bumper crops in the usual places and an end to ethanol subsidies for corn here in the U.S.

I saw an interesting article about improving yields in sub-sahara Africa. Apparently, much of the soil is acidic and thus will not produce high yields even with fertilizer. What the African farmers need is agricultural lime, which is less expensive and which made be made from local lime deposits in some areas. I hope that more work can be done in this vein. Increasing crops there would be very helpful.

Otherwise, it is a good time to start a garden and look for alternative sources of carbohydrates for home cooking.

[TommyO]

5. There are two big causes as far as I can tell

Increased fuel costs impact both the growing and transportation of food, and the repurposing of land for corn to feed the bio-fuel craze.

[phantom power]

6. climate change appears to be the cause:

"Droughts in Europe, fire in Yakima about a year and a half ago which destroyed the hops crop," said Schuck.

Severe weather ruined hops production in Europe, causing many farmers to plant corn instead for ethanol production. It all means hops are now going for $35 to $40 a pound instead of the $3 to $5 this time last year.

http://www.nwcn.com/statenews/washington/stories/NW_022508WAB_hops_shortage_beer_LJ.28d2600b.html

[pscot]

7. Hops grows like kudzu

This situation should self-correct pretty quickly.

[phantom power]

2. With all the businesses trying so hard to hold their prices steady...

It's like a fault-line that's jammed. When it finally slips, all hell is going to break loose.

[jpak]

9. My garden plan keeps getting bigger and bigger

if the snow ever melts....

[Javaman]

10. Same here, now it's expanding to fruit trees as well. nt