The Mudcat Café TM
Thread #138922   Message #3182067
Posted By: artbrooks
05-Jul-11 - 06:13 PM
Thread Name: BS: The price of groceries!?
Subject: RE: BS: The price of groceries!?
One major factor driving food price increases besides the ever-increasing cost of getting commodities from the producer to the consumer is the move toward ethanol in gasoline. As more corn (maize) and other grains are used to produce ethanol, less is available for direct consumption and food animal feed. Increased production is only possible through the use of less productive land - where it is necessary to use more fuel, fertilizer, etc., to produce a given amount. Simple supply and demand is pushing the prices up.

In the US, the CPI-W, which determines cost of living increases in Social Security, veterans' benefits and Federal retirement includes the following:
          Food and beverages
          Housing
          Apparel
          Transportation (including the cost of gas)
          Medical care
          Recreation
          Education and communication
          Other goods and services
The basic reason that there has been no increases in these benefits in the past two years is that there was a 5.8 % in 2009 (mostly driven by large increases in gas prices), and the statistical cost of living actually went down in the following two years (following - no surprise - the price of gas). We can expect between 1% and 2% next year, depending on (surprise!) changes in the price of gas.