Corvette Forum : DigitalCorvettes.com Corvette Forums banner
1 - 20 of 21 Posts

·
Banned
Joined
·
31,366 Posts
Discussion Starter · #1 ·
It's getting pricier to throw some ribs and burgers on the grill. And you can blame the surging price of corn.

That's because much of the corn grown in the U.S. is used as animal feed. And "we're using $6 corn to feed hogs right now," up from about $4 last year, says Michael Swanson, an agricultural economist at Wells Fargo (NYSE: WFC - News) in Minneapolis. "Either the hog guy is going to go out of business or you're going to pay more for pork." So if you "want barbecue ribs," he adds, "you're going to have an extra $10 attached to it."

A lot of manufacturers and retailers are expected to bump up prices this year on many basics — from ribs to coffee to khaki pants — as they pass along the escalating prices of the commodities, or raw materials, they use.

The prices of many commodities — including corn, cotton, wheat, coffee, sugar, cocoa and soybeans — surged last year as severe weather crippled some crops and demand from nations like China and India continued to explode. And the trend is expected to continue this year.

The United Nations' Food and Agriculture Organization's monthly Food Price Index, which monitors the monthly change in a basket of commodities including meat, dairy and sugar, rose for the sixth straight month in December to its highest level since 1990.

How high prices will go depends not just on commodities prices, but how a product is made as well. "The less processing that occurs...the more you're going to see farm prices translate to the retail or grocery store," says Ephraim Leibtag, senior economist, food markets branch, for the U.S. Department of Agriculture. Higher oil prices also are making it more costly to manufacture and ship products. And other factors, such as packaging and advertising, play a role as well.

Here's a look at where you can expect to feel the sting.

What You Eat

Mr. Swanson expects retail food prices to rise between 3% and 4.5% this year, compared with 1.5% in 2010. And some products will be hit particularly hard.

Corn futures prices hit a 30-month high in mid-January, mostly due to droughts in Argentina that have increased concerns over global supplies for this year. But the surge in corn prices doesn't necessarily mean you'll see a price jump on Corn Flakes or even corn on the cob, Mr. Leibtag says. Since corn is used mostly as feed (as opposed to sweet corn used for food), you'll likely be paying more for pork, beef and poultry, he says.

Pork is up about 12% from a year ago, beef 6% and poultry 2%, Mr. Swanson says. And poultry is expected to increase further, he says.

What's more likely to affect the price of a box of cereal is wheat: 7% of the commodity factors into the retail cost, according to the USDA. And wheat prices soared to two-year highs at the end of December due to harsh weather conditions plaguing major wheat producer Russia.

Jack Brown, chief executive of Stater Bros. Markets, a 167-store grocery chain in southern California, says cereal prices rose 6% in increments last year and the retailer has passed along half of that increase to consumers — and will continue to do so in 2011.

The supermarket chain also has raised the price of packages and cans of coffee by 4% in response to an 8% rise in wholesale prices about three months ago, Mr. Brown says. Coffee-bean prices surged 77% in 2010.

Andrew Lazar, a package-food analyst at Barclays Capital in New York, says he has already seen higher prices on the Folgers and Maxwell House coffee brands.

Food companies are keeping mum on their plans, however. A spokesman from Kraft Foods, which owns Maxwell House, said price increases will be delayed as much as possible. A spokeswoman for J.M. Smucker, which owns Folgers, said there is "nothing to report on pricing action."

Mr. Lazar says "cost pressure and pricing will be front and center [for] most, if not all, food companies" in earnings calls coming up over the next month. General Mills (NYSE: GIS - News) , Kraft (NYSE: KFT - News) and Sara Lee (NYSE: SLE - News) have discussed pricing in previous calls.

Earlier this month, General Mills bumped up prices on refrigerated baked goods, hot snacks and frozen vegetables, after modestly raising prices of some of its cereal brands in December. The company declined to comment on commodities prices.

Kellogg has talked about expecting 2% to 3% price increases in 2011, but hasn't specified which brands, Mr. Lazar says. Kellogg declined to discuss commodities prices.

In some cases, prices may not rise, but you will see fewer discounts or get less for your money. For instance, because of sugar prices' 30-year high in late December, packages are expected to shrink to a four-pound bag, from a five-pound bag, Mr. Swanson says. "You're getting 20% less" for the same price, he says.

What You Wear

Not only are you likely to dish out more for what you eat, expect to pay more for what you wear as well.

Cotton futures prices skyrocketed 92% in 2010, thanks to growing demand as well as floods in Pakistan and heavy rains in China that damaged crops.

And that surge is likely to translate into a bigger price tag for many of the cotton basics we wear — including shirts, socks, jeans — and even bed sheets. How big the increases will be depends on the percentage and weight of cotton in a product.

Retail prices of jeans are expected to increase this year by 4.3%, socks 2.7%, sweatshirts and sweatpants 2.4%, polo shirts 2% and T-shirts 1.8%, according to industry group Cotton Inc.

Mens' clothes, in particular, are expected to get a bigger price bump because more of the garments contain cotton (compared with apparel for women and children) and they're a heavier weight with a higher cotton content, says Kim Kitchings, Cotton Inc.'s senior director of corporate strategies and program metrics. Think casual slacks and white dress shirts.

Some manufacturers and retailers already have indicated that high cotton prices will impact price tags this year. For example, Eric Wiseman, chairman and CEO of VF Corp. (NYSE: VCF - News), which owns brands including Lee, Wrangler, JanSport and Nautica, said in an October 2010 earnings call that between 10% and 30% of VF's products, such as denim, will see price increases.

"When it comes to cotton-based product," Mr. Wiseman said, "we are seeing in every channel of distribution and product category, price increases that will be executed next year. ... We are not the first people to have these conversations. Everybody is out there facing the same pressures."

Email: [email protected]

http://finance.yahoo.com/banking-bu...-budgeting&sec=topStories&pos=4&asset=&ccode=
 

·
Banned
Joined
·
12,109 Posts
Yeah...

been watching the prices going up.


Fookin bacon sure as hell jumped a full buck or more.



5 bucks for a few fookin slices of heart attack on a plate/75 percent lard, 25 percent pork.....:crazy:

Good thing I dont buy pork often.....
 

·
Registered
Joined
·
19,476 Posts
Anybody still want to argue that printing more and more money isn't going to hurt? :nuts:
 

·
Registered
Joined
·
25,253 Posts
I was talking to a cattle rancher in my office last week. The Fort Worth Stock Show is going on right now and everyone is talking price. He said the price of cattle is as high as it's been in a long time, but the cost of feed, whether commercial feed, corn or hay is also the highest ever, and the low cost option of growing your own hay is no longer low cost because the cost of fertilizer is as high as can be. These things tend to go up and down with supply and demand, though - higher meat prices mean less consumption which drives down demand and therefore price. It probably will go down as these dynamics occur.
 

·
Banned
Joined
·
31,366 Posts
Discussion Starter · #5 ·
Yeah...

been watching the prices going up.


Fookin bacon sure as hell jumped a full buck or more.
Did you also notice that those are 12oz packages now, not 16? I went shopping with the wife the other day, completely amazing what has happened with food prices in the last 12 months, and they are doing it through sizes rather than the price itself.

Good think hogs and cows are plentiful around these parts..
 

·
Registered
Joined
·
19,914 Posts
Why the hell are you guys buying prepackaged bacon ? Go to the deli... have them cut it fresh and thick. Way better. Same price.
 

·
Banned
Joined
·
31,366 Posts
Discussion Starter · #8 ·
Why the hell are you guys buying prepackaged bacon ? Go to the deli... have them cut it fresh and thick. Way better. Same price.
:laughing: I just put a 245lb'er in the freezer, and have 2 more waiting in the wings.. :thumbsup:
 

·
Registered
Joined
·
19,914 Posts
That's entirely too much meat for one family to eat. You should send one to me. I only say this because I am concerned about your health... and I'd kill to have some resemblance of years past... when I had all the "FU" money in the world. :laughing:
 

·
Banned
Joined
·
31,366 Posts
Discussion Starter · #10 ·
That's entirely too much meat for one family to eat. You should send one to me. I only say this because I am concerned about your health... and I'd kill to have some resemblance of years past... when I had all the "FU" money in the world. :laughing:
:laughing: We keep a couple hogs fat year around.. my wife has one that goes almost 300lb that is just like a damn dog.. we trap em young, 25-35lb's and then fatten them on hog feed mixed with corn, plus a lot of bread and leftovers. Great pork. :thumbsup:
 

·
Registered
Joined
·
19,914 Posts
Stop already... I got it !

 

·
Registered
Joined
·
19,914 Posts
Funny story about that "natural food". Couple of years ago we belonged to a coop farm about 30 minutes up the hill. We got lucky and pulled Saturday duty. So, every Saturday morning we would go up and feed the steer, lambs, chickens -water the gardens... etc. My littlest one (4 or 5) really took to a cafe on the property. She would spend the whole day playing with it and feeding it. I told her not to become to attached to it... of course, she didn't hear a word I said, nor could she comprehend the meaning of my warning.

To make a long story short... she over heard me telling my wife that the cow was being delivered later that afternoon. She apparently went out and prepared for it's arrival by making a fort for it, in the backyard.

Suffice to say... she learned a valuable lesson that afternoon... Never... ever... become attached to -and give a name to your food. (Chocolate milk never tasted so good on a BBQ)

:laughing:
 

·
Banned
Joined
·
31,366 Posts
Discussion Starter · #14 ·
Funny story about that "natural food". Couple of years ago we belonged to a coop farm about 30 minutes up the hill. We got lucky and pulled Saturday duty. So, every Saturday morning we would go up and feed the steer, lambs, chickens -water the gardens... etc. My littlest one (4 or 5) really took to a cafe on the property. She would spend the whole day playing with it and feeding it. I told her not to become to attached to it... of course, she didn't hear a word I said, nor could she comprehend the meaning of my warning.

To make a long story short... she over heard me telling my wife that the cow was being delivered later that afternoon. She apparently went out and prepared for it's arrival by making a fort for it, in the backyard.

Suffice to say... she learned a valuable lesson that afternoon... Never... ever... become attached to -and give a name to your food. (Chocolate milk never tasted so good on a BBQ)

:laughing:
:laughing: Yep, I always have to tell my wife not to get too attached, especially when it's time to fill the freezer or BBQ some yardbird.. I really love the fresh eggs, not that watery no taste crap you get at the store.

I just feel for the folks who live close to the limit for foodstamp cutoff, energy/food inflation always hurts them the most. Even the foodstamp recipients get hammered because their allocation doesn't go up with the prices.
 

·
Registered
Joined
·
19,914 Posts
"food-stamp recipients"... that's a entire thread on it's own. The amount of money that is wasted on this program, is astonishing.
 

·
Employee of the Year
Joined
·
1,180 Posts
The demand for corn based on the misguided idea of ethanol in gasoline is driving up the price of corn which is contributing the rise in beef prices.
 

·
Registered
Joined
·
244 Posts
I'm not a fan of the ethanol in gas either. Bad for fiberglass tanks used in many boats, and it reduces fuel economy. So any money saved on the price is lost in fuel economy. (arguable depending on the car, my daily driver truck is on the loss side) The only advantage I personally see is a slight horsepower increase. and it is ever so slight.
 
1 - 20 of 21 Posts
Top