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Oh is nothing sacred?? Hops, Grain and now...

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DUCCCC

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Pizza prices have been climbing for a couple years now based on the rising cost of subsidized dairy product pricefixing. Mozzarella costs have more than doubled, and with this grain price increase, I say it's time to stop paying farmers to not grow things, or pour perfectly good milk down the drain to keep prices up artificially.

Of course I haven't followed my farming family members recent activities in OR and NE, so I may be a little behind in current market manipulation here...

ETA: Don't get too offended by my statements above, they're basically tongue in cheek. I do have family working the land and I really don't mean to insult most farmers.
 

Nurmey

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Funny you should bring this up. We just had a lunch with our congressman today at work. I work for a national pizza chain and not only has the price of cheese double but wheat (flour) has tripled. It due to two things. There are a couple of rouge traders manipulating the market and there is no limit to how much wheat can be exported. Since the U.S. dollar is weak right now, most of our grain is being exported.

Do not think that pizza is the only thing that will be affected. Soon the price of a loaf of bread could go to $4. Higher prices on pasta, milk, cheese, bread, and anything with wheat will be hitting your grocery stores very soon. When I talked to the head miller at General Mills to discuss possible grain mixing to reduce flour costs, he told me that there wasn't any grains available. Not that it was high priced, it's just not there.

It is a sad day for America when we will not be able to feed our own due to grain shortages. I urge everyone to do their own research and email their congressmen and senators and encourage them to put a cap on exports.

Yes, the grain shortage will put a damper on brewing but it will also put a huge damper on feeding your family.
 

adx

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To top it all off I heard on the radio that they're trying to DCWASA is trying to raise water price by 7%.

I'm just waiting for the price of yeast to go up.
 

Fingers

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We're missing the bigger picture. Chickens eat wheat. Chickens have wings and lay eggs. Therefore the price of hot chicken wings and pickled eggs will skyrocket! Oh, the horror!
 

zoebisch01

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Lol, Fingers.

Guys batten down the hatches, an economic storm has begun. I honestly believe it is the wind of change that will finally drive the population to stop wasting so many of our vital resources. Everything is affected by the price of that thar crude erl.
 

david_42

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Well, watching people waddle around, I can't help but think higher food prices could be a good thing.
 

Soulive

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One my local pizzerias has had a sign up for a couple years saying they had to increase the prices. I think they mentioned the Mozzarella prices as being the main reason...
 

Naidirem

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Quoth:'Well, watching people waddle around, I can't help but think higher food prices could be a good thing.'

I wonder if it wouldn't actually be harmful though. Most of the 'cheap' food available at the supermarket etc. is actually less nutritious for you anyway. Which means the people on the tightest food budgets will buy more crap (not that they weren't already).
 

Soulive

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Naidirem said:
wonder if it wouldn't actually be harmful though. Most of the 'cheap' food available at the supermarket etc. is actually less nutritious for you anyway. Which means the people on the tightest food budgets will buy more crap (not that they weren't already).
That's exactly how I feel. Its not as easy/cheap to eat healthily in this country. I mean I'd save tons of money if I could live on McDonalds, but I can't. I used to work with German interns and they would all gain weight when they came to work here. They were very surprised by the difficulty in finding affordable, healthy food...
 

BierMuncher

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My only carbs are in the form of HB.

...and the occasional baked potato...

...and some periodic jalepeno chips...

...and every now and again...some red hot candies...

...then there's the Triscuits...
 

zoebisch01

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david_42 said:
Well, watching people waddle around, I can't help but think higher food prices could be a good thing.
That and the proliferation of waste.
 

Nurmey

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The point isn't about overeating, it about average people not being able to afford healthy staples. Bread, milk, and cheese are not luxury items but may become that way. BTW, everything in the food supply chain is connected and all food prices have skyrocketed. With 36 million Americans living below the poverty level, what are they suppose to eat?
 

rattler_mt

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when my wife worked at the local elevator in 96 the cost of an average bushel of wheat for this area was $5.........................last year this time it was about $5 a bushel...............in 12 years the price of wheat didnt change by enough to notice......right now locally the average bushel is $15 or so though a few guys have the high protein stuff that worth about $18.50.....couple of them are holding out for $20 cause they just want to frame the receipt........cause they have never seen it at $20 a bushel and dont think they ever will again. no local farmer is expecting it to stay high, most are figuring it will drop back down to $5 in a year or two..............personally looking at the other agricultural products that are being tilled under to grow corn for the ethonal, i figure its going to level out to $10 or so a bushel in the next few years........it takes oil to grow wheat, either in diesel to run the machinery to plant, harvest and haul to the elevators..........not to mention the fertilizer and pesticides and herbicides that are made from petroleum.......... the cost of wheat should stay high but i think the current prices are a spike and nothing more........it should level out, granted at higher than the past but i doubt we will be paying $15 for average for to many years.............
 

beala

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ma2brew said:
[...]ETA: Don't get too offended by my statements above, they're basically tongue in cheek. I do have family working the land and I really don't mean to insult most farmers.
Why are you so apologetic for you're ideas? Surely you didn't mean them sarcastically, because they are exactly right. Subsidization of American farming produces inefficiencies that benefit the American farmer at the cost of harming the world market (including us consumers). Also, ideas such as capping the max amount of exports are shortsighted. Econ 101: A cap on exports is the same as a cap on imports (by virtue of the balance of trade, etc). That is, it may reduce the cost of grain, but at the price of hurting importers. Government intervention like that will simply shift the economic pressure. What needs to be done is that we need to face the reality that American farming is horribly inefficient, and a deregulation needs to occur. Tariffs on foreign agriculture need to to be lifted and subsidization of domestic agriculture needs to be put to an end. If this means the end for American farming, so be it. Preserving it simply comes at too high a cost.
 

Buford

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I don't see it as much as an increase in price/value as much as a dollar being worth less.
 

Brew Runner

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beala said:
What needs to be done is that we need to face the reality that American farming is horribly inefficient, and a deregulation needs to occur.
Deregulation is a great idea. They deregulated the power industry and prices went up and continue to do so. No part of the petroleum industry is regulated and you see how that's been going. When it comes down to it, people can survive without petroleum energy, but how about food?

I think that they need to address the issues you mentioned, but without making it a totally free market. Just IMHO.
 

Judd

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The sex shortage has caused sex prices to go up recently, with no end in sight. As an unmarried 20-year-old, this does not bode well for me.
 

beala

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They deregulated the power industry and prices went up and continue to do so. No part of the petroleum industry is regulated and you see how that's been going.
The power industry? Are you referring to public utilities? Public utilities and the grain market aren't analogous at all. Utilities are subject to strange things like natural monopolies, while the grain market isn't. Also, I'm not really sure what deregulation you're referring to, or how you've drawn any causation between the two events other than that they happened at the same time. Same goes for your argument about the petroleum industry.

As far as oil prices, the recent increases have nothing to do with a lack of regulation. Middle eastern tensions and natural disasters (ie hurricane Katrina) have limited the supply and increased prices. I'm not sure exactly what you're suggesting, but if the government were to regulate the price at the pump, it would only result in shortages to the consumer. Instead of expensive gas, there would be no gas. Why would any foreign producer of oil sell to the US if the government imposed a price cap? This is all simple econ 101.
 

MikeFlynn74

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As far as oil prices, the recent increases have nothing to do with a lack of regulation. Middle eastern tensions and natural disasters (ie hurricane Katrina) have limited the supply and increased prices. I'm not sure exactly what you're suggesting, but if the government were to regulate the price at the pump,
Wrong- Iraq is producing more oil than ever- Oil prices rise because its winter, spring, summer, OJ Simpson is in jail, mars is in retrograde......

Oil is high because they want more profits and America and China are handicapped because we have built our entire infrastructure on oil reliance.

In Alaska they pump the oil out of the ground and then sell it to China- Why not the US? Because they can charge more and make more profit.

Oil prices go up because oil speculators make billions doing that.
 

beala

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In Alaska they pump the oil out of the ground and then sell it to China- Why not the US? Because they can charge more and make more profit.
So you're suggesting that prices have risen because consumers in china are willing to pay more? Well, certainly that's true. The superficial explanation is that prices rise because someone is willing to pay more. The more important question is why are they willing to pay more? With these statements, it sounds like you're suggesting it's because of price gouging:
Oil is high because they want more profits[...]Oil prices go up because oil speculators make billions doing that.
That simply wouldn't make sense. Raising prices in a market as competitive as oil wouldn't benefit anyone (consumer or seller). Firms make the most profit at equilibrium price (ie not price gouging).

Or maybe you're suggesting an increase in demand caused in part by china's high rate of development. I would agree that this could explain it in part, but I still maintain a decrease in supply has something to do with it. Wikipedia: "Helping to fuel these increases are reports from the U.S. Department of Energy and others that show a decline in petroleum reserves, and analysts reporting that petroleum production is at[4][5][6][7] or near full capacity[122][8] [123]. In June 2005, OPEC admitted that they would 'struggle' to pump enough oil to meet pricing pressures for the fourth quarter of that year.[124]"

But really, this discussion is moot because I have yet to hear how regulation could fix this, and how that same logic could be applied to the grain market.
 

MikeFlynn74

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So you're suggesting that prices have risen because consumers in china are willing to pay more?
No but exporting oil they dont pay the same taxes- Therefor more $ per barrel goes into the oil companies.

Raising prices in a market as competitive as oil wouldn't benefit anyone (consumer or seller).

Wrong- Raising prices indeed benefits the seller- They have yet to see a decline in consumption yet their production cost have not increased at all. They used to turn a profit at 30$ a bbl, guess what- They are turning quite a profit at 100$ a bbl.
 

beala

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MikeFlynn74 said:
No but exporting oil they dont pay the same taxes- Therefor more $ per barrel goes into the oil companies.
They don't pay the same taxes? Who is "they?" Are you saying oil producers are taxed less in china, so they choose to export more there? Well, this seems an awful lot like an argument for deregulation. If the taxes in the US weren't so high, the supply of oil in the US would increase, and the price would decrease.
They used to turn a profit at 30$ a bbl, guess what- They are turning quite a profit at 100$ a bbl.
The prices have increased, and so have profits, but it's through no fault of the oil producer's. They are simply selling at the market equilibrium price. Producer's don't decide the price, the market does. If supply has decreased forcing prices up, producer's are helpless to stop it. If you're suggesting that they should simply lower their prices and cut us consumers a break, then you have a very profound misunderstanding of economics. If one altruistic company were to simply lower their price back down to $30 a barrel, demand would quickly out pace supply, and there would be a shortage. That company wouldn't turn as high a profit as others, and they would quickly be put out of business. If all companies were to lower their prices (say, though government price capping), there would be a nationwide shortage, which is also clearly undesirable.
They have yet to see a decline in consumption yet their production cost have not increased at all.
Yes, you're right. Consumption has, in fact, increased, further justifying the price increase. As far as production costs, that's not the only factor effecting supply.

And I'm still not sure what you're arguing for. Are you arguing for regulation? Against regulation?
 

MikeFlynn74

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Im just saying you believe what the oil companies want you to believe.

The inflated prices are synthetic and we are paying for it. If there truly was an issue oil companies would be doing more to find an alternative to oil for thier futur survival instead of bankrolling billions a month.

Exxon makes $75,000 a second in profit. Thats something to think about.

besides this is waaaaaaaay off target.
 

beala

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Exxon makes $75,000 a second in profit. Thats something to think about.
Yes, they're making a profit. Is this such an awful thing? I've already explained why it's through no fault of their own.
If there truly was an issue oil companies would be doing more to find an alternative to oil for thier futur survival instead of bankrolling billions a month.
Ensure their future? Is there reason to believe they'll be going out of business soon if they don't find an alternative to oil? It seems, finding an alternative will reduce their profits. Also, the economics of research is a very strange subject. There's good reason for corporations to leave this sort of work up to the universities. EDIT: One more thing. You seem to presuppose that finding a new energy source is as easy as giving some money to scientists. You then go on to say that because oil companies haven't made a revolutionary breakthrough in energy, they must be up to something. I find that argument very unconvincing.
 

MikeFlynn74

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You then go on to say that because oil companies haven't made a revolutionary breakthrough in energy, they must be up to something. I find that argument very unconvincing.
A revolutionary breakthough would be worth 100s of trillions more than oil could ever produce.

Yes, they're making a profit. Is this such an awful thing?
Its not a bad thing- Its capitalism. However what was thier profit per second when oil was $30 bbl.
 

CBBaron

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beala said:
Why are you so apologetic for you're ideas? Surely you didn't mean them sarcastically, because they are exactly right. Subsidization of American farming produces inefficiencies that benefit the American farmer at the cost of harming the world market (including us consumers). Also, ideas such as capping the max amount of exports are shortsighted. Econ 101: A cap on exports is the same as a cap on imports (by virtue of the balance of trade, etc). That is, it may reduce the cost of grain, but at the price of hurting importers. Government intervention like that will simply shift the economic pressure. What needs to be done is that we need to face the reality that American farming is horribly inefficient, and a deregulation needs to occur. Tariffs on foreign agriculture need to to be lifted and subsidization of domestic agriculture needs to be put to an end. If this means the end for American farming, so be it. Preserving it simply comes at too high a cost.
I have to argue strongly against this statement. American farming is extremely efficient. More so than just about any where else which is why we can export so many agricultural products despite our very high labor costs. Like was mentioned in a post above, the costs of agricultural products have been decreasing for decades if you adjust for the effect of inflation. The only reason farmers are still in business is because then have increased productivity. The government price supports and assistance helps to maintain the agriculture in the states. Nearly all governments provide similar assistance for local farmers to prevent dependency of basic staples on foreign countries. The government price controls work to reduce the big swings in commodity prices and many programs have the long term effect of keeping prices low by keeping farms in business.
A doubling in milk prices or a tripling in wheat prices only brings the prices back to levels they were 10 or 20 years ago. The prices are not "historic" highs once you adjust for inflation.

Craig
 

mrfocus

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:off:

beala said:
Producer's don't decide the price, the market does. If supply has decreased forcing prices up, producer's are helpless to stop it.
In your Economic analysis, you are supposing that the oil market is a perfect competition market. The main condition that isn't met is:
Atomicity: Each producer and consumer is too small to affect the market, which is NOT the case in the oil market, because first of OPEC act as one... and there are what, five huge companies who buy the oil and sell it in their domestic markets? (Shell, Exxon, etc.) Thus, each producer and each buyer are big enough to affect the market.

And now, before you come and defend such and such, I know, the FBI et al are ALWAYS watching the leaders of the different oil companies, to make sure there is no price fixing. I believe the phenomenon is "unconscious parallelism".
 
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