Prices

In Korea, produce costs are staggering. It almost makes sense to rather by a Burger King than to spend W4 000 on a few button mushrooms, W7 000 on grapes, W7 000 on nuts or strawberries. All these items have to be imported. Yes, it almost makes sense to eat Fast Food, instead of cooking up a vegetable stir fry. Almost...because of course if you eat junk food you'll have to buy vitamins, headache pills etc to balance your diet, and join a gym etc. Anyway, I will paint a fuller portrait of Fast Food in a different letter.

One of the major areas of concern, in the Peak Oil era, is simply that rising energy costs mean rising costs of everything. Especially food, and especially food that has to travel a long way to reach us. Like beef.

In South Africa, while beef, milk, bacon and apples have recently become a lot more expensive, peanut butter, maize meal and peas have become a lot cheaper.

It's important to remember this basic concept: the reality of Peak Oil means that we have pumped out half of the world's oil. That also means we've used up the easy half of what's available, and even if we're brilliant with our technology in ways that completely outperform our past performances, we're still stuck in a cycle of increasingly difficult extraction, increasingly tough costs to mitigate.
And Peak Oil implies another simple reality: very long term (over decades), spiralling global inflation.

At ground level this translates most simply into less and less means to buy less and less food. This why it is imperative that we look to growing food locally, and begin to learn (and live) a lifestyle without fast food.

We're already paying more for food, so we ought to make large scale local changes now.

SA paying more for food
Oct 31 2005 09:28:01:873PM

Johannesburg - Based on a basket of 75 goods survey by the National Agricultural Marketing Council, year on year food price inflation for August averaged 1.37%, the council said on Monday.

"This is basically saying that if prices in August 2005 are compared to prices in August 2004, consumers are paying on average 1.37% more for the same basket of food products," the council said.

The prices of a number of food products decreased by more then 10% over the period August 2004 to August 2005 and include: super maize meal (- 18.95%), frozen peas (-10.5%), peanut butter (-12.9%) and cauliflower (- 15.5%). There were however products whose prices showed some rapid increases of more then 10% in the same period.

They are: potatoes (31.9%), rindless back bacon (11%), boerewors (16.7%), skimmed milk powder (12.7%) and Granny Smith apples (34.8%).

According to the council, cake flour prices continue to decrease, which has been a consistent trend since September 2003.

"Overall, cake flour prices have decreased by 20% since September 2003 and 5.1% in 2005 alone."

Prices of cooking oil have followed a similar trend to that of cake flour with year on year price levels dropping by approximately 9.7%. For the period January 2005 to August 2005 prices decreased by 3.7%.

Over the last four months prices for fresh milk stabilised and have begun to show a downward trend, the survey shows. For the period January 2005 to August 2005 fresh milk prices increased by 4.8% and 4.4% for a 1 litre sachet and 2 litre carton respectively.

The retail price of a 2 litre carton of full cream milk decreased from R10.31 in March to 10.05 in August - a 2.5% drop.

"The price of skimmed milk powder over the past four months has stabilised at approximately R53.65/kg, while the price of long life milk has decreased by 3.7% in 2005."

From January 2005 to August 2005 the price of frozen chicken increased by 6.7%, while the price of fresh chicken decreased by 0.21.

"These price changes have caused the price of frozen chicken to be higher then that of fresh chicken. High stock levels of eggs have contributed to the decrease of 4.8% in the price of eggs as stores and suppliers are running various promotion campaigns on eggs," the council said.

"The different cuts of beef tend to follow a similar trend. The prices of brisket, beef mince and stewing beef in the past were quite different.

Over the past year and a half the prices of these three cuts have converged to an average of R25.50/kg. Year on year beef prices increased on average by 7.1%

"Pork and lamb chop prices are highly volatile from one month to the next as they are largely effected by seasonality and supply and demand fluctuations.

Year on year inflation however shows that both prices are in fact fairly stable with the price of pork chops decreasing by 0.98% and lamb chops increasing by 1.34%."

And at the same time, in America:

A number of Fed officials have openly worried about the potential threat of rising inflation. The Fed's most recent survey of the economy, the Beige Book, noted that prices were increasing for everything from lumber and hardware to hotel rooms.

Also, the Labor Department reported that consumer prices in September shot up by 1.2 percent, the biggest one-month increase in a quarter-century, led by a record rise in energy prices, reflecting the impact of hurricane-forced production shutdowns along the Gulf Coast.

"There is a risk that energy could break out into a bigger inflation problem," said David Wyss, chief economist at Standard & Poor's in New York. "We have gotten through Katrina and oil prices have backed off a bit, but there is a risk that if we have a harsh winter, energy prices will rise again."