Big Brood

While changes in grocery and fuel prices will naturally lag behind the price of commodities, they are linked. In an article at kiplinger.com, we see that the commodity prices may be a bubble about to burst.

What’s the takeaway? Commodity prices are inflated due to speculation (ie: people wanting to make a quick profit). This speculation is further driven by lower returns in most other areas of possible investment.

ETFs are allowing more and more investors to jump in and out of the commodities market, increasing volatilty and adding to the market. The dollar is falling, which inflates prices as foreign suppliers try to compensate to maintain profits.

In the end, we’ll hopefully see a drop in some of these commodity prices in the summer but not that much as supply is still low compared to demand.

 Have you seen these price increases recently?  Have you changed any of your habits because of them?

The Star-Telegram has an article talking to the Hinkles about 10 tips to save money on your food bill.

We don’t have any teens yet so I’m glad to get a little advice from a more “advanced” family. From their tips, the only things I don’t think we’ve tried are:

• Shopping at international markets where you may find things like rice and spices cheaper.
• Setting a once-a-month Use-It-Up week to use up leftovers and bits & pieces.
• Setting aside stale bread. I don’t think we usually get much stale bread.

We do have a few small international markets around here, so it sounds like we need to take our price book and check them out!

Do you have any other tips to add to these that help you to save money on your bill?

This Marketplace Report entitled: Rice prices straining developing nation is another example of food price problems much like our rising food commodities prices here in the U.S This rice shortage is due to a combination of environmental factors, the falling value of the dollar (which much of rice trades are priced in) and strong economies in some nations that use rice as a staple.

We are eating a lot of rice because of Goosey’s temporary (we hope!) gluten-free diet but it will only be an inconvenience for us. These people are depending on this as a staple. When you are spending $0.80/day out of your $2.40/day on your food, a small shift makes a big difference.

For a deeper discussion of political implications of the rice shortage, take a look over at The Warrior Lawyer  for The Politics of Rice.

Have you seen an increase in the price of your food staples locally?  Are you doing anything to adapt?

I was wandering around wondering about my grocery bills and I ran across this great piece from the UIUC Farm Gate. The summary:

“The relationship between corn, ethanol, and gasoline prices has resulted from the federal ethanol production mandates, and they will have an impact on corn prices particularly if a short corn crop results from weather issues. The reduction in production will raise corn prices to levels that ethanol refineries cannot afford to operate, and either the ethanol production mandates will have to be relaxed or refineries will have to be heavily subsidized to be able to buy corn at nearly $8 projected prices.”

This article really hits home with us because, of course, we worry about fuel prices, food prices and our environment. It appears as if La Niña is likely to cause some drought conditions in the U.S. this year, leading to higher corn prices. NOAA’s drought monitor seems to back this up.

Corn prices are also higher this year because of government mandates around ethanol and a generally “greener” focus on ethanol in our country. All of this comes together to push commodity prices up. That is, farmers who want a better crop to sell, will sell corn because of its higher price. That leaves less land available for wheat and soy beans, which also pushes their prices higher.

In the end, the combination of government mandated use of ethanol, our focus on corn-based ethanol and looming drought conditions mean higher prices for our groceries based on these commodities. Also, don’t forget that much of our corn goes to feed our beef.

Have you seen the effect in your grocery bill yet? Do you see any counter-trends?

Since mid-October or so, Goosey and I have been maintaining a price book. We have found that the price book has been one of our most effective tools in fighting food costs. As our brood grows in age and numbers our food costs are beginning to increase. To keep on top of it, we have used a price book. Here’s what it has done for us.

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