"by Robert Gavin, Globe Staff | March 9, 2008
American families, already pinched by soaring energy costs, are taking another big hit to household budgets as food prices increase at the fastest rate since 1990.
After nearly two decades of low food inflation, prices for staples such as bread, milk, eggs, and flour are rising sharply, surging in the past year at double-digit rates, according to the Labor Department. Milk prices, for example, increased 26 percent over the year. Egg prices jumped 40 percent.
Escalating food costs could present a greater problem than soaring oil prices for the national economy because the average household spends three times as much for food as for gasoline. Food accounts for about 13 percent of household spending compared with about 4 percent for gas....
Many analysts expect consumers to keep paying more for food. Wholesale food prices, an indicator of where supermarket prices are headed, rose last month at the fastest rate since 2003, with egg prices jumping 60 percent from a year ago, pasta products 30 percent, and fruits and vegetables 20 percent, according to the Labor Department.
"No retailer can absorb cost increases indefinitely," said Laura Sen, president of BJ's Wholesale Club, the Natick chain of discount warehouse stores. "Given what we are seeing, all retail channels need to raise prices, and from our observations, are doing so."
Amy Brnger, 43, of Portsmouth, N.H., just needs to look at her grocery receipts. For a long time, feeding her family of three used to cost around $125 a week. Suddenly this winter, her bill leaped to about $200.
Quickly, Brnger, a school counselor and mother of a 9-year-old daughter, looked for ways to save. She buys fewer organic products, which can cost twice as much as conventional goods. Instead of buying chicken breasts, she buys whole chickens and cuts them into parts, saving about $2 a pound. She buys dried beans, instead of canned. And she is baking her own bread....
Several factors contribute to higher food prices, analysts say, but none more than record prices for oil, which last week closed above $105 a barrel. Oil is not only driving up production and transportation costs, but also adding to demand for corn and soybeans, used to make alternative fuels such as ethanol and biodiesel.
That's why I am against BURNING OUR FOOD and CREATING HUNGER!!!
Sort of makes you think the rulers plan to get rid of us, doesn't it?
As a result, corn prices have more than doubled in commodity markets over two years, and soybeans nearly tripled, according to DTN, a commodities analysis firm in Omaha. Meanwhile, with poor harvests in major wheat-producing regions, wheat prices have more than tripled.
These crops have a profound impact on food prices because they form foundations for many products, including oils, sweeteners, and flour. Corn, for example, is a key ingredient in livestock feed. When the price of corn rises, so does the price of feed, and ultimately, so do the prices of meat, poultry, and eggs....
The weak US dollar, at or near historic lows against the euro and other currencies, adds more pressure. Oil and other commodities trade in dollars, so when the dollar is worth less, producers demand higher prices to make up for the loss in value.
It's NOT oil prices RISING, it is the DOLLAR DROPPING!!!
That is what is behind the "rise" in prices -- JUST AS RON PAUL SAID!!!!!
This pressure raises inflation fears, which in turn make commodities attractive to investors, who view them as holding value during inflationary periods. As investors buy, demand grows and commodity prices go even higher....
Food prices rose nearly 5 percent, more than double the average rate of the previous 10 years. Prices will rise even faster the next five years....
Anthony Conti, executive vice president at Agar Supply Inc., a Taunton food distributor, said there is little doubt consumers will continue to pay more. "Every day we get notices from manufacturers that prices are going up," he said.
Agar sells to supermarkets, restaurants, and other outlets, and it is paying some of the highest prices ever, Conti said. Cheese prices have doubled from a year ago, and beef prices have risen more than 50 percent. On top of these costs, Agar is paying about $3.70 a gallon for diesel - more than $1 above last year's prices - for a truck fleet that travels about 4 million miles per year.
It all adds up to even higher prices in grocery aisles and restaurants as costs get passed down the supply chain. Barb Phillips of Medway, for example, said the price on a case of formula for her 7-month-old son recently jumped from $32 to $38. Phillips, a loan processor who earns less than $40,000 a year, said she has stopped buying snacks and fresh produce for herself because prices are too high and stretches her meat purchases by making soups and stews."
Think she makes a mean shit stew, readers?
Could name it after Bush: Georgie's Lying Shit Stew!!!
"
The definition of a recession - two consecutive quarters of negative growth - is meaningless to most of us. It's like saying there's ice on Mars.
George Bush, who often appears to reside on the Red Planet, works assiduously to avoid the R word, even as a top economic adviser concedes we might go into negative growth this quarter. Alert the media.
These distinctions are gobbledygook. Ben Phillips put it best. Phillips, a cabbie, comes out of the Dunkin' Donuts in Jamaica Plain one morning last week. I ask him if we're in a recession. He replies: "I don't know what a recession is. All I know is that things are not right now."
His calls are down about 40 percent. No tips. Gas is killing him. And he's spending a lot less on himself.
Later that day, I'm up on Beacon Hill, the plummy side that slopes to Charles Street. An older gent with silver hair in a yellow foul-weather-gear jacket is walking his two dogs past DeLuca's, the ancient grocery store on Charles where a friend once told me you have to take out a second mortgage to buy an orange.
I ask the man if we're in a recession. He nods. I ask him if this is affecting him personally. In an elegant minimalist move, he moves his head back and forth ever so slightly, his eyes radiating a bemused "surely you jest." The man finally breaks into speech with this: "The past 10 years have been very kind to the rich."
Back on planet Earth, I'm reminded of the probate judge who said divorce is meaningless to the very rich and the very poor and a financial disaster for pretty much everyone else. So is recession.
"Absolutely we're in one," says Chris Fahey, who works for an affordable-housing nonprofit. "We've tried to refinance our house but the interest rates are much higher. Our children are struggling to find work," she adds. "We're rethinking a trip to Ireland to celebrate our 25th anniversary. It's all too tight. There's no flexibility."
I talk to a contractor in Southie name Jerry. He came over from Ireland 38 years ago and has been in the contracting business for 36 of them. He says we've been in a recession for five months. This is a slow time of the year for contractors anyway, but he says above and beyond that his business is down over half.
What drives Jerry really nuts is the food inflation. "One hundred dollars for a bag of groceries is nothing now," he says. "Ten dollars is a breakfast."
I talk to Kenny Henderson, a restaurant cook who has been out of work for eight months. He's also in Southie, taking his infant for a swing along Broadway in the stroller. "I'm a stay-at-home dad now," he says.
Even folks like Joy Silverstein, who has built the successful hair salon Fresh Hair in JP over 25 years, feels it. Silverstein is doing fine, but she sees recession seep all over her business.
"We offer more coupons, more deals," she says. "Clients come in every eight weeks now, not every six. They're not getting the extra services like manicures and facials. Also, they go to
Personally, she's cautious how she spends her money, even if she doesn't have to be: "I watch where to buy my gas. I'm buying more in cash. I'm using coupons, doing whatever I can to save a penny."
What we've got here is fear of the future - completely appropriate under the circumstances. Steve Adams, a federal government economist whom I run into on the Common, says the situation is largely attitudinal. True, but then this attitude didn't just fly in on the red-eye from the coast.
Economists as a group are harebrained on their best day. But Adams doesn't get lost in pie charts. He cites a pizza maker in his home town of Holden who has seen the price of flour triple in six months. The man gets the flour from California, where foreign demand has driven prices through the roof.
You generalize about people at your peril. Just when I'm ready to write off the swells of Beacon Hill as recession-proof, I run into Kathryn Quirk, who is stopping by a friend's house in Louisburg Square, epicenter of the cobblestone class. Quirk, who lives nearby on the good side of the Hill, stunned me by saying the recession is affecting her family a lot.
"My husband is a history teacher and I'm a full-time mom," she says. "We're cutting back in every way - consolidating credit cards, creating a monthly budget." She refers to the Whole Foods on Cambridge Street as "Whole Paycheck," and notes she drives a 10-year-old sport utility vehicle and her husband a 1992 Corolla.
The couple bought a two bedroom, three-story walk-up in 1997, when the real estate market paused a bit. Just married, two incomes, no kids. They loved the place. They loved Boston. Still do. But two kids have arrived since then, and she dropped her full-time marketing job some time ago. Money is tight, the condo is small, and they're pondering selling.
So we retreat farther under the bed as the recession bites and the bad news rises. We live defensively. Do we really need a formal name for what's going on? Why not simply say, as Americans always have, we're in hard times and leave it at that?"
Yeah, never mind that ass-reaming you are getting, 'murka!
Least you gotta bowl of shit to bury your head and scream into!
