This morning in the NYT there was a long article about the increase in food costs. Item #1 was Canola Oil which saw a 161% increase in price. Flour 61% and carrots 14%. What is interesting here is the time frame. between 2019 and 2022. In that period the price of diesel rose from $2.49 per US Gallon to $ 5.48. Between August 5th 2019 and August 8, 2022, the price of diesel rose by 122%. Energy is not everything in the production of food, but it's an important component. I was told by farmer friends that fertilizers and other pest control products have also seen a massive increase in prices over the past two years.
The reality is that food processing has become more efficient as time goes by and therefore despite the increase in energy costs, food prices have been relatively stable. However, worrying is the increase in the cost of Canola oil because it is a lightly refined product, therefore, the increase in food costs is just, in my opinion, starting. Once the increase in cost of feed, energy and other input costs are accounted for...
BTW this farmer friend bought massive quantities of diesel fuel in the spring of 2020 -- he will have to refill his diesel tanks this autumn because they are nearly empty. His cost per gallon was very low at $2.50 will probably rise to "probably more than $5.00". He will have to purchase the diesel this autumn for tax purposes otherwise he will be taxed based on the cost of the fuel he purchased in 2020... that advantage of large corporate farmers is evident here.
Comments