Wednesday, June 11, 2014

Here comes money trouble

So in the past few months, an occasional news story has said food prices would rise, last year's drought being a major factor.  Lots of extreme weather and crop damage in 2013.

I read them and thought, yes, we'll be paying "more," a term that's a solvable problem when you're in the privileged class, and a crisis when you're trying to feed a family and make ends meet.

We have watched three different stores cut, and cut, and cut items we buy.  It wasn't one chain in trouble, it's all of them around here.  Fewer organics, fewer gluten free (purchased on a real MD's advice, so please, no lectures about how moronic the gluten-free "trend" is), less variety in general.

Today we hit our most-visited supermarket.  I was flabbergasted at the start, AND at the finish.

You'll need to enlarge it to read the price tabs.  I thought they were a mistake.  Seriously.  And they weren't.

I've bought these fruit juices, yes, organic and pricey, for several years for breakfast smoothies.  They've crept up from the 3.99 range into the 4.99-ish rage, and when I read about crop failures I must have thought they'd jump a full dollar (or gosh!  even more!).   But...??!  Not to nearly 10 dollars.  Tack tax onto that.

Nearly 10 dollars.

The store knows that's not gonna fly, and they've just started stocking a new brand, also organic, back down at 5.89, and I did buy it.

On we shopped, with our usual list.  Long ago we decided that healthier food was an investment that might keep us a little healthier, a little longer, as aging and higher disease risk started workin' their magic.  So for stuff we use most, we have not bought the cheapest options for a very long time.

We also do plenty of of regular, normal Big Food Industry products.   Each is a considered decision.  Organics are more important when they're something we consume a lot of.  I get organic juice in glass bottles, and not major non-organic brands in plastic bottles.  We do organic milk.

This is all to point out that our shopping doesn't change much.  So when we got to checkout and the total was

TWO HUNDRED FIFTY-NINE dollars, I was ......  I was......

I can't provide an item by item comparison.  We got two containers of whey protein, not one, and two magazines, but they don't explain this being about $80 more than I was used to spending for similar -- again, not identical -- but similar carts full.

This is unsustainable.  Partly for us, but we can adjust and comparison shop and work harder at it, but mostly for the economy.

Those brands in the photos can't stay in business if they have to charge close to 10 bucks for a bottle.

The substitute brand will supposedly have to raise its prices too, even if they manage to beat the competition.  I don't think close-to-$8, or close-to-$9, will sell much better than close-to-$10 does, and more shoppers will be over in the Big Food juice aisle, dropping spending back down, but to the standard brands' also-rising prices.

Families with budgets are already there in the Big Food aisle, where those higher prices will hurt them, badly.  Where will they get the extra money?

I'm liberal but I am not a progressive  (whole 'nother topic), and Mother Jones magazine annoys me way too often, but it does have some good information, and one column in the March/April issue was enlightening about SNAP buyers and how they stretch their dollars.

Don't get me started on the writer's defense of using SNAP money for junk food, which made me say very bad words.

So.  How much further can these buyers stretch it?

The crash of 2008 had analyses written about it ad nauseum.   One article I recall from very early in the crash pointed out that the trigger was the gas price jump.  Not that the mortgage debacle wasn't the root cause, not that the economy was healthy before that.  It emphatically was not.  But its plates could keep spinning in the air until those homeowners paying those absurd mortgages could no longer budget for them.  And that was the extra 30, 50, 100 dollars they had to put in their gas tanks every month.

That's what the article said, and, again, it wasn't the root cause, and multiple other articles haven't mentioned it (though I could have missed some) but it had to be a major factor.  The dollars of your income per month are the dollars of your income per month, even if filling your tank has jumped from $30 to $50.  I remember emptying my account to fill a Honda Civic's tank, and I know for sure a whole population getting hit that hard was unsustainable.

Here we are again.  Natural events may have jacked this basic budget item up, but how many families' budgets will tank this time, and can we do anything but batten down?


Dann said...

I am unsurprised at the trend.

We have supported several policies that undermine food costs. "Fortunately" for us, the result is only higher prices. Malnutrition and starvation are larger problems in other places.

The primary policy in question is our support for corn based biofuels.

Our rapid retreat from the Middle East isn't helping fuel prices either. And fuel prices are what drives the economy.

More fracking would help. The Keystone pipeline would also help.

In any case, I have seen this coming for quite some time. Very sorry that the cost for the food you need is going up.

I am fortunate enough that most of my increases are in food that I either largely avoid, or am consuming in moderation for other reasons. Thus far, the impact on fresh fruits and veggies has been minimal.

I eat a ton of fresh fruits and veggies.

But I hear that will be changing soon with the price of gas going up again....

Hope all else is going well for you.

Nostalgic for the Pleistocene said...

Hi Dann - I gotta say fracking worries me. It seems to be showing signs of being geologically very dangerous.

Meanwhile, Warren Buffett invests 15 billion, and plans to invest that much again, in renewable and alternative energy. I have to wonder if he knows something we don't.....


Dann said...

Sorry for the dee-lay!

I agree with the geologic concerns about fracking. It is the one thing that does have me seriously concerned about that approach.

I'm glad Mr. Buffett is making that sort of investment. Lots of others have made investments as well.

I've been following alternative energy technology since I was a teen drooling over electronics magazines. I'd really like to see alternative energy become cost effective because it would mean that we could be energy independent.

More than that, if Americans come up with a profitable technology, we can make money selling it to the world while simultaneously undermining the economies of folks that use petro-dollars to do us harm.

But we remain focused on inefficient technologies (i.e. solar & wind) while ignoring energy storage issues as well as the development of both fission and fusion nuclear technologies.

Policies that encourage the use of food stocks to create fuel are an offshoot of that sort of short term and narrow minded policy making.