Tuesday, June 3, 2008

The cost of food is going up, up, and away and there is no end in sight

It is going to get harder and harder to be able to buy food as prices increase. This is a somewhat forgotten side affect of the increase in oil prices. Sure people are saying it is the cost to ship food that is increasing prices. However people are forgetting that most farms these days use a lot of energy and fuel just to run. The price increases in oil, gas, and subsequently everything else must be just about killing the small and large farms. It is not like days long ago when you needed a horse to plant and harvest, and you milked the cows by hand. Everything is pretty much automated or requires specialized heavy-duty equipment. So now it just costs more to grow or raise food, so the end cost of our food goes up a little here.

Then we ship it all over to wholesalers, factories and stores. The shipping has increased in price so the cost of food goes up a little more there. If it needs to be processed or even just sorted the price will go up even more. Sorting and processing is usually done by equipment that uses energy. Very little is done by hand anymore. Even if it was done by hand the cost just to light a sorting or processing area has gone up and the cost gets tacked onto food. I don’t want to even think about the large factories that are full of equipment and machines all designed to reduce the labor force, increase productivity and sucks back energy.

Then things finally make it to the store. Well the store is facing higher costs in shipping and running the store. So food prices go up. To cut some costs they could reduce the air conditioner and lower lights but they will still have an electric bill to deal with. The increase cost has to be covered by increasing the price of food. In the end we are going to be paying more for our food.

Some people might argue that electricity should not be affected by the cost of oil, but it is. Think about just the cost to mine and transport coal, the cheapest source of energy right now. That is going to go up because they use gas. So it is going to be even harder to buy food. You have to spend more on electricity, oil, gas and any retail items. Then with what is left you have to stretch to buy food, which costs more. This is going to hit the poor so badly that the already over stretched food banks may not be able to handle the need.

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