[Shodan]

Paying The Price
Get ready to shell out more for everything from gas to food to borrowing money

Tiffany Crawford and Eric Beauchesne
Canwest News Service

Friday, April 25, 2008

Soaring prices on everything from food to gasoline walloped consumers Thursday.

And the Bank of Canada warned of weaker economic growth to come -- new evidence the U.S. recession has deepened and is dragging down other sectors of the economy as it continues to slide.

Basic food items are becoming more scarce and the price of those commodities is soaring, matched only by the rapid increase in the cost of gasoline. Food shortages, hoarding by producing countries and a pernicious cycle of energy prices driving up production costs is only making the situation worse.

Maple Leaf Foods Inc., one of Canada's largest food processors, reported a loss on Thursday due to soaring costs for grain used in its bakeries and hog barns.

"These are stunningly, stunningly challenging and unique times," chief executive Michael McCain told shareholders at the company's annual meeting.

"The world is embroiled with absorbing the implications of the simple truth that food will be considerably more expensive, well into the future," he said.

Food riots have spread from Haiti to Thailand and panic buying has even hit North America -- Wal-Mart has imposed rice rationing in the United States because of shrinking supplies and Bruce Cran, president of the Consumers Association of Canada, said he was told that store shelves were being emptied of rice in British Columbia.

"It's a human trait to hoard, but there is only so much food to hoard," he said. "The world crisis is obviously going to have a ripple effect into Canada."

Eating habits will be forced to change, said Cran, and its likely that in the near future consumers will no longer have the option of buying fresh pineapples and oranges in the winter. "My advice is to go speak to your granny and get a canning recipe before she leaves this world."

Rice prices jumped five per cent in Thailand as prices surged to $1,000 a tonne Thursday. The country has been hit by an increased demand from developing countries at the same time that poor crop yields have left rice stocks at their lowest in 20 years. India, Vietnam and Thailand have restricted rice exports.

Wholesale prices of some popular rice varieties have doubled in the last five months because of shortages overseas, said Kanti Shah, co-owner of Shah Trading Co., a Montreal food importer.

"It's definitely a crisis. I don't think it will get so bad that rice won't be available here, but the price will be high," said Shah. "You know, the Asian crowd in North America are major consumers of rice -- breakfast, lunch and dinner -- so they've been stocking up."

Canada has largely been sheltered from rising food prices, even relative to the U.S., said Avery Shenfeld, senior economist at CIBC World Markets, on Thursday in a report titled Food Inflation: Coming to a Grocery Store Near You. "But after looking at what's behind that exceptional gap, it's clear that Canada's good luck on food prices is likely to run out in 2009."

Bank of Canada governor Mark Carney warned Thursday that along with food and energy price inflation, it's also going to start costing consumers and businesses more to borrow money, though he suggested the bank will help offset any further tightening in domestic credit markets with further rate relief.

The bank's quarterly Monetary Policy Report reiterated an earlier warning that the U.S. downturn -- it stopped short of calling it a recession -- will be deeper and more protracted than it anticipated only three months ago and that in turn the Canadian economy will weaken as exports fall and raising funds in financial markets becomes more difficult.

Still, the central bank is predicting that inflation will not rise beyond its two-per-cent target by 2010, based on an easing in oil prices to $100 US a barrel by then -- a rosy outlook not shared by other analysts.

The driving public was certainly feeling the effects of gas-price inflation this week -- the price of diesel fuel peaked Thursday in Churchill Falls, N.L., at over $1.50 a litre, according to GasBuddy.com. Regular gasoline in that Labrador community hit a high of $143.6 a litre, and averaged $1.24 a litre across Canada on Thursday.
© The Edmonton Journal 2008

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[MolsonExport]

Whenever possible, I do my shopping at Costco.

[Coldrsx]

price elasticity is not a factor yet imo for demand and spending.... i mean really a jump from 1.15L to 1.25L is only $5-7 more per fill.....i spend $7 a pint on Guinness, and i fill up on that more than once a week and often multiple times in a night.

[kitchener-lrt]

Hopefully people don't stop spending there money because we all know what happened the last time we all did that (Great Depression).

[LordMandeep]

Great now we are seeing Stagflation...

Increased unemployment and increased inflation.

[sync]

*waits patiently for the crash*

[miketoronto]

I think the news just likes to make an issue out of everything. So fruit costs 2cents more.
Really the prices do not seem that more expensive at all, so far.

Gas in another story, but we all know people don't need to drive as much :)

[Bigtime]

Does Freedom still cost a buck 'o five? ;)

[wild wild west]

I haven't noticed much of a difference other than gasoline, but it's the old adage of "death by 1000 cuts". Not a big deal if bread goes up by 10%, but if everything does then people will start to feel the pinch.

[Boreal]

*waits patiently for the crash*

That's my plan of action. The balloon has got to burst, especially when fundamental issues at play haven't been fixed. Of course, if I'm wrong, I like my crow defeathered and baked, with a little asparagus and asiago.

[feepa]

I think the news just likes to make an issue out of everything. So fruit costs 2cents more.
Really the prices do not seem that more expensive at all, so far.

Gas in another story, but we all know people don't need to drive as much :)
connect the dots my friends, why do you think that fruit costs 2 more cents?

Its not like the fruit or farmer is getting more... its that the price of ___ has gone up, so they inturn are adding the cost on to you.

Does the price of oil drive inflation, or does inflation drive the price of oil?

[O-Town Hockey]

connect the dots my friends, why do you think that fruit costs 2 more cents?

Its not like the fruit or farmer is getting more... its that the price of ___ has gone up, so they inturn are adding the cost on to you.

Does the price of oil drive inflation, or does inflation drive the price of oil?

Neither, a bunch of idiots in suits drive up the price of oil and inflation at their discretion. Then they take all of our money, spread it 2-3 inches deep around a boardroom, and roll around naked in it :D .

But seriously, this whole oil/gas price thing is so artificial. They use it (along with the media) as a way to scare consumers into voting for someone/something or doing whatever it is that they want.

[The Jabroni]

Things are just rising up, and they will continue to rise up.

Working at a supermarket, food prices are already going up. For example, Bananas risen in price by like 10 to 15 cents per pound.

Not only gas prices are being affected, but the worldwide population of bees are mysteriously disappearing. Without them, you won't see a jar of honey, a pale of ice cream, a basket of strawberries, and whatnot anymore.

...and the gas prices are not helping us consumers either.

[Slug]

Apparently some Americans got so excited about the "World Food Shortage" headlines that Costco and Walmart had to limit the purchases of rice to 70 pounds a visit:haha:

[miketoronto]

All this will do is teach people that we have to think more local and stop shipping in food from across the world when we can grow it right here :)

[vid]

Actually, mike, I have found the locally grown blueberries are about twice as expensive as the ones the sell at Superstore, which are apparently from Oregon. Same for raspberries. The organic ones I buy occasionally are from California and cost 4$ for a little container (something like 2 ounces, 3 at most) while a similar amount at the farmers market (locally grown) is six bucks! Local apples are about 1.50 a pound, while you can get yellow delicious (which isn't grown here) for 69c a pound at Superstore. (Yellow delicious are my favourite. I don't like the apples we grow here. They're some sort of hybrid species and they taste too sour.) Local green onions are 1$ for 5 or 6, and 69c for a while pound at superstore. So no, buying local isn't cheaper. I'm sorry. (Also, the local ones use pesticides; the ones from Superstore are organic.)

It's so weird referring to fruits and vegetables as organic. They're all organic! All plants are organic! They're pesticide-free, you idiots.

Bacon prices have almost doubled in a few years, but beef seems to be relatively stable. I don't buy much meat these days anyway, it takes a large chunk out of my food budget. Like most low income people, my diet is mainly potatoes and grains. Us poor folk love our carbohydrates. Did you know Pepsi costs less than a third of most fruit juices, and about half as much as milk? No wonder we're so unhealthy! Eating healthy is too damn expensive. Fresh fruit, outside of apples, bananas and sometimes oranges, are a luxury in my household, but pepsi and white bread is in abundance. Remember when white bread was a luxury item? It now costs 25c less than whole grain.

Actually, most sodas are healthier than most fruit juices. Compare the nutrition facts on any soda with those on almost any fruit juice and you'll be surprised. The fruit juices that are healthier than soda will cost at least three times as much per litre.

[Only The Lonely..]

The old blues men had it right, a dime ain't worth a nickel no more.

[miketoronto]

Depends VID. I can get local stuff for either the same price or a little bit more than stuff shipped in from half way around the world.
Plus we have killed off local economies by shipping everything in. If our local economies were stronger, things would be cheaper. And with the high cost of gas, lets see how much longer the imports are cheaper.

[vid]

Local things are transported with gas, too, and method of style dictates that my name is spelled vid. I never use capitals.

We can't grow vegetables on a large scale up here, even the wheat we produce is mostly used as feed as it is low quality. We HAVE to import.

[DC83]

I think the news just likes to make an issue out of everything. So fruit costs 2cents more.
Really the prices do not seem that more expensive at all, so far.

Gas in another story, but we all know people don't need to drive as much :)

I agree, Mike. Media loves to over-exagerate, we all know this. The only ppl who believe them are the rediculously uneducated ppl!

If we all freak out and stop buying stuff b/c we're scared of what might happen, then it's going to happen. If everyone lives the way they have for the past decade-or-so, we'll be fine. Bread is $0.10 more than it wa last year. Oooh. (ps: according to the Ontario Food Terminal in Toronto, prices haven't changed here in Ontario nearly as bad as in the rest of the world: source (http://www.cbc.ca/canada/toronto/story/2008/04/25/food-prices.html))

[graupner]

Local things are transported with gas, too, and method of style dictates that my name is spelled vid. I never use capitals.

We can't grow vegetables on a large scale up here, even the wheat we produce is mostly used as feed as it is low quality. We HAVE to import.

Our wheat is of very high quality. It is mostly used to produce pastas like spaghettis and such.
Italy is one of the top importer of our grain and the majority of 'Made in Italy' pastas you'll buy are made with canadian wheat.

We are also a major producer of barley, potatoes, carrots, maple sirup, and apples when in season.


Canada has an important leverage in this whole inflation thing: it has huge ammounts of natural ressources, from oil, to iron, to copper, to diamonds.

Most of the inflation today is driven by the rising price of natural ressources.
We benefit a lot from this and it hedges the canadian economy from the global inflation.
Sure, we will be hit, but on a much smaller scale than most countries like Europe, USA or Asia.

[vid]

I meant wheat and corn grown in and around Thunder Bay. :P

[scumtoes]

a sign of peak oil? is the global demand for oil now out pacing the world's production limits?

we all see the price of oil rise...almost daily. but now is that oil price increase starting to effect all the other things we buy that rely on oil as a means to grow, transport or produce that certain item?

i learned about the "peak oil" theory in 2004 and thought, "maybe not in my lifetime", but now, it seems highly probable. all the predictions made by the peak oil crowd of what will likely happen at the start of a post peak production model are unfortunately starting to come true. poorer countries being "out-bid" for food and facing famine, an almost uncontrollable rise in the price of oil, airline mergers, localized financial meltdowns, unconventional oil resources being exploited (alberta's oil sands), rising prices of "everything", etc, etc.

[raisethehammer]

Actually, mike, I have found the locally grown blueberries are about twice as expensive as the ones the sell at Superstore, which are apparently from Oregon. Same for raspberries. The organic ones I buy occasionally are from California and cost 4$ for a little container (something like 2 ounces, 3 at most) while a similar amount at the farmers market (locally grown) is six bucks! Local apples are about 1.50 a pound, while you can get yellow delicious (which isn't grown here) for 69c a pound at Superstore. (Yellow delicious are my favourite. I don't like the apples we grow here. They're some sort of hybrid species and they taste too sour.) Local green onions are 1$ for 5 or 6, and 69c for a while pound at superstore. So no, buying local isn't cheaper. I'm sorry. (Also, the local ones use pesticides; the ones from Superstore are organic.)

It's so weird referring to fruits and vegetables as organic. They're all organic! All plants are organic! They're pesticide-free, you idiots.

Bacon prices have almost doubled in a few years, but beef seems to be relatively stable. I don't buy much meat these days anyway, it takes a large chunk out of my food budget. Like most low income people, my diet is mainly potatoes and grains. Us poor folk love our carbohydrates. Did you know Pepsi costs less than a third of most fruit juices, and about half as much as milk? No wonder we're so unhealthy! Eating healthy is too damn expensive. Fresh fruit, outside of apples, bananas and sometimes oranges, are a luxury in my household, but pepsi and white bread is in abundance. Remember when white bread was a luxury item? It now costs 25c less than whole grain.

Actually, most sodas are healthier than most fruit juices. Compare the nutrition facts on any soda with those on almost any fruit juice and you'll be surprised. The fruit juices that are healthier than soda will cost at least three times as much per litre.


Do some reading on 'big food' and their government subsidies and market manipulation strategies.
The reason it's cheaper to buy food from the other side of the world is because of the mass production of it vs. local farmers barely able to get by.
We have over 10 million people in Ontario, yet farms are closing down regularly. Crazy IMO. They should have jobs for life, unless we all stop eating.
Don't worry about 'organic' for most things (other than meats).
The more important factor is to buy 'local'.
In Hamilton the downtown Farmers Market is awesome...cheaper than the chains and lots of local grub.

I hope we can all rediscover the joys of our local economy in the future as oil creeps into the $200-300/barrel range.

[canucklehead2]

There are so many factors that are going into this price spike. Part of it I'm sure is Peak Oil, as well as the shift of food consumption in China and India, but also there is probably a bit of speculation happening as well. My solution? The 100-mile diet. Try and buy food within a 100-miles of wherever you live, whenever you can. That cuts down significantly on the amount of energy use that is going into the production and transportation of food.

I also wouldn't be surprised if we do in fact start to see vertical farms go up in the near future, like the ones that have been proposed for the past few years.

[Cambridgite]

While we may not be in a crisis yet, I predict things will slowly become more and more difficult. Those of you denying peak oil, consider this. Oil is, for all intents and purposes, a non-renewable resource, right? Well then, this means the supply is limited, and production will decrease over time. While this is happening, demand for oil continues to rise. In part, this is because of our own lifestyles becoming more decadent in the West. But the big rise is coming from developing countries like China, which certainly won't let petty concerns like sustainability twart their success. As any economist will tell you, as supply falls and demand rises, the price will also rise. It'd be nice if oil just magically appeared out of nowhere, but that's not the case.

So what do we do about it? So far, we have no feasible replacements. Biofuels sound great at first, but they're a net loser in energy, since most of our crops now use petrochemicals for production (it will also drive up the cost of food). Wind energy, solar power, and nuclear can solve our electricity problems to some degree, but likely won't *replace* oil altogether. Our cities could become more pedestrian/transit-friendly than they already are, but much of the suburban form is still unworkable. These places will likely be the slums of the future. If the value of your suburban home starts to fall, SELL SELL SELL!!

The least we could do right now is start thinking of a back up plan. We need to realize that this is not just a matter of being gouged, but ultimately, we create the demand for oil and foreign-made goods. Think about how you can economize on your travelling habits. What is the cost of your commute? What will it cost in 2012? How about 2020? All of a sudden, that commute from Cambridge to Mississauga as a single occupant doesn't look like it's getting you a bigger house. Think about where your food comes from, how it gets there, and how its made. Think about ways to conserve electricity around the house. We can blame the gouging corporations all we want, but at the end of the day, realize that we're putting them in business. Likely, what we'll see is a rise in more environmentally-friendly/energy conscious businesses and an end to globalization. Not because we've had a change in heart, but because circumstances have forced us to change.

[miketoronto]

There was an energy crisis in the 70's. This could just be on the same line as that, and not really a huge meltdown.

[vid]

The more important factor is to buy 'local'.

And what do you buy when local can't sustain you? There is no way the farms in Northwestern Ontario could support Northwestern Ontario if everyone bought local. We don't have enough farm land. It's like the rain forest--the soil is great for growing trees, but once you cut it down for a farm, it will grow things for one, maybe two seasons and after that it's crap. Except for a few river valleys, we can't farm. Therefore, we can't buy local.

Locally produced meat in Northwestern Ontario is mainly obtained by hunting. Only a handful of types of fruit grow here, our growing season is just long enough for the heartiest types of grain. Most of what we produce is industrial grade, and the volume is too low to support 250,000 people. Buying local can be done but it's not going to be cheaper. At the very least we have to import from the rest of Canada and the midwest. And that has to be transported somehow.

Unless you have some magic wand that can turn 2 inches of soil on top of Canadian shield into farmland, we're going to have a hard time producing things locally and beating prices of imported food, with or without subsidies.

[miketoronto]

No one said everything has to come local. But if you can't get everything local, then you go the next closest place, which is southern Ontario, which has some of the best farm land in North America.
There are a ton more local products we could use and consume, then we do.
How did they do it decades ago?

We have lost the balance, and import way to much in today's age.

[feepa]

Support your local farmers markets.
Don't shop walmart/costco.
If you have to go to a grocery store, ask for local products only.
Support local small business in your town, especially if they carry local products, and they are not just trying to become the next big walmart.

[vid]

then you go the next closest place, which is southern Ontario,

Actually, that's Minnesota. Then Wisconsin. Then Manitoba. Then Iowa. (And so on.)