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Thread: The price of wheat doubles

  1. #1
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    The price of wheat doubles

    Thank you environmental wackos!

    New York - Dressed in his white apron and baker's hat, Jose Espinal puts the finishing touches on a chicken pot pie that will be sold to customers of Cucina & Co. later in the day. He carefully places a crust on the pie and crimps the top and bottom together.

    But to make the dough for about 300 pies, Mr. Espinal, the pastry chef, used 22 pounds of flour – an item that the store knows will soon be rising in price.

    "I'm expecting it this week," says Michael Salmon, director of operations of Cucina, which is in Macy's in Manhattan. "Maybe 20 or 30 percent."

    Why the increase? The prime ingredient in flour is wheat, which these days is acting more like oil – rising sharply on commodities exchanges. On Monday, the price of March spring wheat on the Minneapolis Grain Exchange shot up to $24 a bushel, the highest price ever. Within the past month, the price of some types of wheat has risen over 90 percent. Already, agricultural experts say, it's getting hard to find the type of wheat used to make pasta, noodles, pizza, and bagels.

    "Supplies of some types of wheat will be extremely tight," says economist William Lapp, president of Advanced Economic Solutions in Omaha, Neb. "I don't think we'll see physical bread lines, but supplies will be just tight."

    Companies that use wheat say they are overwhelmed by the sharp rise and have little choice but to pass on at least part of the increase to consumers. Flour manufacturers, for example, are raising prices by at least 30 percent or more. Since the beginning of the year, bread in the supermarket has risen anywhere from 10 to 30 cents a loaf.

    Overall, in January, consumer food prices were up 4.9 percent in comparison with January 2007. Cereal and baked goods rose 5.5 percent. Some items went up even more: Dairy products increased 12.8 percent and fruits and vegetables 6.1 percent.

    Rising food prices, combined with escalating energy prices and falling home prices, are putting a squeeze on consumers' pocketbooks. A drop in discretionary spending is one reason that economists are increasingly worried about the economy moving into a recession.

    Rising food prices also make it difficult for the Federal Reserve, which has to balance rising inflation with a slowing economy.

    Yet despite the recent rise in food prices, over a longer period of time, spending on food as a percentage of household income has been declining, points out Michael Rizzo, senior economist at the American Institute for Economic Research (AIER) in Great Barrington, Mass. For example, in 1970, food represented 19.3 percent of household expenditures. By 2006, it had shrunk to 12.6 percent.

    "One of the reasons for the decline is the huge increase in productivity: It's become less expensive for the farmer to produce food," he says. "Even among the poorest, the share of their budget going to food purchases is at an all-time low."

    Still, there is no doubt that over the short term, products made with wheat will rise in price. Because of the weak dollar and poor harvests abroad, exports of US wheat are up 30 percent this year. It hasn't helped that some parts of Kansas and Oklahoma have had drought conditions. [B]At the same time, some farmers have shifted crops from wheat to corn and soybeans to take advantage of demand for biofuels. [/B]

    "This has been a very unique year," says Steve Mercer, a spokesman for US Wheat Associates, which promotes American exports of the grain.

  2. #2
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    yeah, I heard about this last week. Because of this, the price of flour has approximately tripled in price.

    All the bakeries in my area are in trouble.

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    [QUOTE=yisman;2389755]yeah, I heard about this last week. Because of this, the price of flour has approximately tripled in price.

    All the bakeries in my area are in trouble.[/QUOTE]

    Tell them not to fear, Obama is on the way!

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    The Atkins Diet is now an economic plan!

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    [QUOTE=Company_Man]Thank you environmental wackos![/QUOTE]

    More like thank you Bush and farm subsidies.

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    [QUOTE=Company_Man;2389687]
    Overall, in January, consumer food prices were up 4.9 percent in comparison with January 2007. Cereal and baked goods rose 5.5 percent. Some items went up even more: Dairy products increased 12.8 percent and fruits and vegetables 6.1 percent.


    "One of the reasons for the decline is the huge increase in productivity: It's become less expensive for the farmer to produce food," he says. "Even among the poorest, the share of their budget going to food purchases is at an all-time low."

    [B]Still, there is no doubt that over the short term, products made with wheat will rise in price. Because of the weak dollar and poor harvests abroad, exports of US wheat are up 30 percent this year. It hasn't helped that some parts of Kansas and Oklahoma have had drought conditions. [B]At the same time, some farmers have shifted crops from wheat to corn and soybeans to take advantage of demand for biofuels. [/B][/B]
    ".[/QUOTE]

    How shocking that you spin the entire increase to biofuels, and ignore the stuff in the same paragraph about the weak dollar (partially a product of Bush monetary policy, btw) and also the weather and supply and demand.

    It's hackneyed spin, even by your standards.

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    Keep it straight Republicans love bio-fuel -- its solar and wind that they hate.

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    [QUOTE=fukushimajin;2389845]Keep it straight Republicans love bio-fuel -- its solar and wind that they hate.[/QUOTE]

    No, the Kennedy's hate wind and solar. The wind farms hurt their view from the Hyannisport complex.

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    [QUOTE=HDCentStOhio;2389921]No, the Kennedy's hate wind and solar. The wind farms hurt their view from the Hyannisport complex.[/QUOTE]

    Exactly.. Uncle Teddy and John Fonda Kerry hate wind power.. (When it's in their back yards)

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    Ethanol really takes the cake
    Sunday, March 16, 2008
    Mueller's Bakery occupies a prominent position along the road I take when I drive to the ocean, tempting me with apple turnovers and hot coffee.
    When I stopped in the other day, the owner and chief baker, Brian O’Neill, collared me.
    "You ought to do a column on food prices," O'Neill said. "Last year I was paying $10.50 for a bag of high-gluten flour, that's the flour you make hard rolls with. This year when we reopened in February it was up to $18 a bag, so I bought a bunch to cover myself. But the salesman told me it was going to skyrocket so I bought more at $22. And just last week I paid $28 for the flour."
    O'Neill recited similar stories re garding shortening and eggs, the other two products essential to the baker's craft. The price of the ingredients may triple, but he can't triple the price of his turnovers.
    "We raised prices 10 percent," he said. He'll probably have to raise prices even more in the near future.
    There are several reasons the cost of staples is skyrocketing, including high fuel costs. But the primary culprit is the obvious one: Congress.
    In an effort to buy favor in the farm states, Congress created huge subsidies for the production of ethanol made from corn. This drove up the price of wheat as farmers switched to corn. The price of vegetable oil rose for the same reason. And the price of eggs rose because hens eat corn, which no longer sells for the price of chicken feed.
    But isn't ethanol helping to reduce our dependence on foreign oil? And aren't biofuels better than oil when it comes to cutting greenhouse gases?
    No. And no.
    Cornell University scientist David Pimental has been researching the economics of ethanol ever since he did a study on it for the Carter administration, which was looking for an alternative to oil in response to the 1979 Iranian hostage crisis. If there is such a magical substance, it's not ethanol. Producing ethanol from corn takes more energy than the finished product contains.
    "We're actually importing more oil to produce ethanol," said Pi mental when I got him on the phone. "It's not making us oil-independent, and it's costing us one hell of a lot of money."
    Still, Americans are seduced by the idea that there is some "alternative fuel" that will permit them to keep driving giant gas guzzlers while also cutting oil imports. I told Pimental about watching a 110-pound woman emerge from a four-ton SUV that pulled up next to me in a parking lot. He did some quick calculations in his head.
    "The tank on that car would hold 30 gallons," he said. "It takes 22 pounds of corn to make one gal lon of ethanol, so that's 660 pounds of corn to fill that tank just once."
    That's 660 pounds of corn that won't make it into the food chain. Yet Congress grants exemptions to the fuel-economy rules for gas guzzlers set up to run on E-85, a fuel that is 85 percent ethanol. Since ethanol has less energy than gasoline per gallon, the fuel economy on these monsters can drop as low as 8 mpg. If you think we can end our dependence on foreign oil with vehicles that get 8 mpg, then you belong in a mental institution -- or in Congress,
    Yet Congress is just getting started in its efforts to construct a corn-state Saudi Arabia. Federal law requires that the current etha nol production of 6 billion gallons be ramped up to 36 billion gallons a year. But that is contingent on proof that the production of etha nol from corn reduces greenhouse gases. And it doesn't, says researcher Timothy Searchinger of Princeton University.
    Searchinger was the lead author of a study published last month that could sink the ethanol indus try. Agribusiness interests contend that ethanol is a green fuel because corn absorbs carbon dioxide from the atmosphere. Searchinger says otherwise.
    "When you take an acre of corn in the U.S. to make ethanol, then essentially an acre is put into production somewhere else in the world," he told me. "When you clear that land, you end up releas ing huge amounts of carbon dioxide that these lands have been storing for decades."
    In other words, the only thing green about ethanol is the cash it puts in congressmen's campaign coffers. Rarely has a program been so completely debunked so quickly.
    "Basically, ethanol just looked like the perfect solution for everybody," said Searchinger.
    It's still the perfect solution as far as Congress is concerned. Etha nol is wasteful, expensive and entirely pointless. Inside the Beltway, that's known as hitting a trifecta.
    Paul Mulshine may be reached at [email]pmulshine@starledger.com[/email]. To comment on his column go to NJVoi ces.com.

  11. #11
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    [QUOTE=Company_Man;2389687]Thank you environmental wackos!
    [/QUOTE]

    Why is it never possible for you to provide a link when you post a story that supports your goofy ideology?

    I mean, you do it a lot.

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