February 17, 2011

World Food Prices on the Rise and They Already Have Their Excuses in Place!

John Miner, of QMI Agency reported, on the 13th of February, 2011, that "Grocery bills [are] set to rise in Canada ... after decades of stable, low food prices."

Either Mr. Miner doesn't eat or he never buys food ... or he's not well enough informed to report on this.

Personal observations include: During the recent oil crisis (about one and a half years ago), the cost of wheat rose significantly at times hitting twice it.s pre-rise price ... now settling to a mere (?) 30 percent higher (hmmm!)
Brussel sprouts were $0.69/lb in 2002. They are now $1.69 when on (very) special.
Butter prices rose about 35 percent in the past eight years.
About four years back one was able to find, in our neighbourhood, most pome fruit at about $0.69/lb during season. Now we're lucky to find it at $1.00/lb.

FoodInCanada.com reports that butter rose seven percent in 2001 and a whopping nine percent in 2005. They further report that one brand of butter rose by a stunning 40 percent in 2004. (C'mon folks, they wouldn't have been able to raise prices like that if everyone else didn't follow along!)

Stable pricing indeed! Almost everyone, it seems, is prepared to blame corn prices. The United States has stockpiles of corn produced on the promise of profits based on this particularly fattening sweetener known as high-fructose corn syrup ... an inexpensive sweetener that likes to stay in the body ... a significant, according to some, cause of obesity.

Kevin Grier, a senior market analyst at the George Morris Centre in Guelph, Ontario is reported to have said "I call it a train wreck. Nobody would have anticipated that in North America we would now be seeing 40 to 45% of our corn crop going into ethanol instead of it being fed to animals."

He should have asked me! When Ontario looked for a place to put its ethanol plant we, here, discussed how much fuel would be used to create this fuel ... and how much animal feed and comestible corn would be lost to fuel production ... and what it would do to the price of corn at the supermarkets. Sorry Kev. No surprise here except that we are surprised that you're surprised!. Further more, everyone still seems to be discounting the amount of fuel that will be used to create ethanol from corn. What an INSANE approach to creating fuel.

That summer (about two years back) we saw corn increase, at the retail level, by about 50 per cent.

So it was just a couple of years ago that we heard, on radio, that the head of the UN Food Agency (I think it was ... but an international food agency head) released a statement saying that the cost of producing food had dropped. It was days later that the head of the Loblaws chain (which includes Real Canadian Superstore, Zehr's, Maxi & cie, Provigo, Wholesale Club and more!) crowed, "We have benefitted from food inflation."

Well, that was no lie - they benefitted from inflating the cost of food, in their many retail outlets, while production and delivery prices (oil, in the meantime, had dropped a bit) went down.

One Ontario farmers' association advocates buying directly from the farmer as a way to get good produce at a fair price but if you look at the price of your vegetables from the farmer, you will see the farmer checks grocery store prices and sells at that price - essentially profiting to the tune of transport costs, storage costs, staffing ... and distribution costs - all of which the farmer, selling from a stall on his/her farm, doesn.t bear. The farmer lies along with the retailer - looking to profiteer on the backs of the consumer. (rotten little lying thieves.)

So, the retailers in Canada are afraid of the arrival of Walmart. If Walmart comes in, they will be recognized as increasing prices unduly.

Further interesting is shopping the different brands presented by retailers. In fact, Canada (probably like most other countries) has very few retailers. Virtually all major grocery retailers in eastern Canada are owned by either Metro (out of Quebec) or Loblaws. Go through the stores. They all charge about the same price for all goods - even though Metro's Food Basics is "supposed" to be an economy store ... just as no frills is an independently owned Loblaws franchise store. You can't get a rain check (and they routinely fail to have stock sufficient to support their advertised sale price) there (but prices for most products are about the same as the more "upscale" stores. What they carry ... what makes them discount stores, is the less expensive (and usually cheaper) product.

It is also interesting how Miner of QMI cited countries where food is more expensive than in Canada. On a recent trip to Germany, it was discovered that food there is about one half the price of food here - in a nation with little land and significantly more stringent growing regulations (vis-a-vis Genetically Modified Organisms foodstuffs [GMO] and other issues) and less space to dispose of agricultural waste. Even in how they treat their livestock ... yet they still manage to bring dairy and other foodstuffs to the market at a fraction of North American prices.

Even Ottawa area farmer Don Kenny, chair of Grain Farmers of Ontario, is excited at the prospect of being able to "build a little equity" with higher prices ... in anticipation of future lower prices. This begs the questions, "When the farmer's price goes down, what happens with the price to the consumer?" (I think we all know the answer to that.)

Canada's "money-well-spent" federally funded Canada Research Chair, Evan Fraser expects a five to 10 percent increase in food prices. Sounds right - I would predict much the same without getting federal money.

Bank of Montreal went out on a limb predicting moderate increases in food prices. Woo-hoo ... What courage! Food prices have been on a steady rise since the inception of time! Hey - Bank of Montreal; Psst ... prices of goods and services go up - look at your own charge sheets.

If the past is any indication of the future, someone will find some excuse to increase the price of everything (including food) to the consumer.

It is true this is somewhat retrospective but; Weren't pork producers across Canada disappearing due to decimated pork prices? I wonder, then, how it is that pork prices dropped not a bit at store level!

Well, I think we've got the idea ... everyone is lying: The producers who charge the same rate as retailers who must cover the cost distribution; the retailers who "benefit from (retailer created) food inflation"; the marketing boards who artificially set prices which seem to increase with no production related basis; the "think tanks" (and other paid analysts) who give no thought to pricing (maybe they're just incompetent); the politicians who, in spite of reduced buying power of their loyal subjects (?) continue to increase taxes so their buying power doesn't slip an iota ... and, in fact, give themselves increases on the backs of the citizenry who constantly find themselves sliding further behind (well, they don't want to suffer with us - they might be well advised to remember that riding the backs of those who pay your salaries is, in almost all cases, the cause of revolution). Maybe it's me ... maybe I'm lying and that 50 dollar bag of groceries we used to buy 10 years ago doesn't cost us 80 dollars today. Maybe food hasn't risen at all ... and we're headed for the first real increase ... just like our advance thinkers seem to be claiming.

Someone ain't telling the truth!

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