Surging Food Prices Essay

916 words - 4 pages

Escalating prices for food are driving up the cost of groceries in the U.S., effecting consumers and companies. “Federal forecasters estimate retail food prices will rise as much as 3.5% this year, the biggest annual increase in three years, as drought in parts of the U.S. and other producing regions drives up prices for many agricultural goods” (Dreibus). For instance, “Drought in Brazil, the world's largest producer [in] coffee, sugar and oranges, has increased coffee prices, while dry weather in Southeast Asia has boosted prices for cooking oils such as palm oil” (Dreibus). Also, “In the U.S., much of the rise in the food cost comes from higher meat and dairy prices, due in part to tight ...view middle of the document...

Overall, this principle fully explains the demand changes of the consumers due to the change in food prices.
The second principle is the changes in supply. Since the droughts in different areas of the world lowered the producer’s resources, the producers had no choice but to raise up the price to keep their profits going. For instance, the drought in California, the biggest producer in agricultural products in the U.S., impeded the production of crops and livestock causing their prices to rise (Dreibus). Also, Brazil’s dry weather has increase the price of coffee (Dreibus). This happens because of the producer trying to reach and stay in equilibrium. According to McConnell, equilibrium price goes up when supply decreases, which shifts it to the left, while demand stays constant (77). The demand stays constant because food is a necessity and people will always demand them. This is the reason why prices rise when the producer’s resources has been lowered.
The last principle is competition. “The price increases pose a challenge for food makers, restaurants and retailers, which must decide how much of the costs they can pass along and still retain customers at a time of intense competition and thin profit margins” (Dreibus). Competition is what drives these companies to keep low prices. For instance, White Castle Management Co. plans to absorb the increases, 12% in beef in February and a future 27% more in beef in the coming August, as long as it can to keep menu prices the same (Dreibus). Also, “during previous inflationary periods, food makers switched to less-expensive ingredients or reduced package sizes to maintain their profit margins; retailers and restaurants...

Find Another Essay On Surging Food Prices

Logistics Essay

4386 words - 18 pages surging demand.Airport infrastructure is strained. Air traffic has been growing rapidly leading to severe strain on infrastructure at major airports, especially in the Delhi and Mumbai airports which account for more than 40 percent of nation's air traffic.http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/EXTSARREGTOPTRANSPORT/0,,contentMDK:20703625~menuPK:868822~pagePK:34004173~piPK:34003707~theSitePK:579598,00.html INDIA

Early Strikes of the American Labor Movement

3753 words - 15 pages never touch their money from month's end to month's end. Once in two weeks is payday. A woman had then worked 122 hours. The corporation furnishes her house. There is rent to be paid; there are also the corporation stores from which she has been getting her food, coal… and [other] cheap stuff on sale may tempt her to purchase..." (Meltzer, 21). Factory employers also cheated women, believing they were defenseless. Some employers did

Jet Blue Airways

6182 words - 25 pages ConditionWhile the domestic airline industry has continued to suffer financial losses through 2004, JetBlue has remained profitable. Their net income is $47.5 million and $103.9 million at the years end for 2003 and 2004. They also generated operating margins of 8.9% and 16.9% in those two years, which are higher than most other major U.S. airlines. Success has been attained during a time of record fuel prices; however, there is continued focus

economy- national planning commision

9686 words - 39 pages harvest as a result of flooding incidences in rice/grains producing areas and drought in northern parts of the country coupled with rising global food and energy prices drove price movements during the year. However, government is taking steps to moderate price increases by enhancing access to improved seedlings and fertilizers, and investing in infrastructure to facilitate sustainable long-term agricultural productivity while alleviating supply side

The Gilded Age

4012 words - 16 pages heads of corporations naturally needed to outdo each other. In many cases the price of lowering prices and speeding up production came in the form of pay cuts and layoffs. The individual needed to serve the means of the corporation. Simply because some workers had poor working conditions does not mean that the US economy was in the gutter. Statistics show that the American economy on the whole flourished during the Guilded and Industrial Age (91

When the Bubble Burst

1539 words - 6 pages By the time I arrived state side from my second tour in the Middle East the housing bubble had already burst. I noticed a drastic change in the way that many of my friends and family were living. Several of my friends that worked in real estate had sold their boats and seconds houses. My own stock portfolio had lost a third of its value. My sister and her husband had defaulted on their home mortgage leaving them scrambling for a place to live. I

phase diagram

4456 words - 18 pages Introduction: Chemical equilibrium is a crucial topic in Chemistry. To represent and model equilibrium, the thermodynamic concept of Free energy is usually used. For a multi-component system the Gibbs free energy is a function of Pressure, Temperature and quantity (mass, moles) of each component. If one of these parameters is changed, a state change to a more energetically favorable state will occur. This state has the lowest free energy

Revolutionary Work of Art

1890 words - 8 pages Walter Benjamin emphasizes in his essay, “The Work of Art in the Age of its Technological Reproducibility” that technology used to make an artwork has changed the way it was received, and its “aura”. Aura represents the originality and authenticity of a work of art that has not been reproduced. The Sistine Chapel in the Vatican is an example of a work that has been and truly a beacon of art. It has brought a benefit and enlightenment to the art

Enlightenment Thought in New Zealand Schools

1594 words - 6 pages In this essay I will be looking at how the political and intellectual ideas of the enlightenment have shaped New Zealand Education. I will also be discussing the perennial tension of local control versus central control of education, and how this has been affected by the political and intellectual ideas of the enlightenment. The enlightenment was an intellectual movement, which beginnings of were marked by the Glorious Revolution in Britain

Psychological Egoism Theory

2240 words - 9 pages The theory of psychological egoism is indeed plausible. The meaning of plausible in the context of this paper refers to the validity or the conceivability of the theory in question, to explain the nature and motivation of human behavior (Hinman, 2007). Human actions are motivated by the satisfaction obtained after completing a task that they are involved in. For example, Mother Teresa was satisfied by her benevolent actions and

How Celtic Folkore has Influenced My Family

1587 words - 6 pages Every family has a unique background that influences the way they live and interact with other people. My parents, who emigrated from Ireland to the States with my three brothers in 1989, brought over their own Celtic folklore and traditions that have helped shaped the way our family operates and lives. One aspect of folklore that has helped shape my family dynamic is the Celtic cross—both its background and what role it has played in our lives

Similar Essays

An In Depth Look At Russia

1849 words - 7 pages culminated in the August depreciation of the ruble, a debt default by the government, and a sharp deterioration in living standards for most of the population. The economy rebounded in 1999 and 2000, buoyed by the competitive boost from the weak ruble and a surging trade surplus fueled by rising world oil prices. This recovery, along with a renewed government effort in 2000 to advance lagging structural reforms, have raised business and investor

Poaching In Africa Essay

2316 words - 10 pages wildlife” by conservationists (Kabukuru,71). The biggest issues to emerge in Africa due to surging levels of poaching are the inherence of corruption, violence, and economic hardship in many African societies as a result of the clash between governmental and militant forces. Not only are militant warlords and organized crime syndicates such as the Lord’s Resistance Army and Shabab heavily involved in instances of poaching across Africa, but the

Starbucks: Where Is The Next Frontier?

3100 words - 12 pages coffee growing, the costs of planting and volume of production is rather constant (Pindyck et al, 2006).Coffee commands global exports worth USD9 billion in 2006 from 25 million coffee growers. The collapse of trade barriers, a jump in production and roasters treating coffee as a uniform commodity have caused prices to fall.Starbucks buys 70% of its beans from Central and South America. It promotes Fair Trade coffee and through its 'CAF&Eacute

Soley De Arque Essay

1991 words - 8 pages basically the hydrocarbons. When the fossil fuels are burnt they gives off energy that can be harness to produce electricity, power vehicles, heat homes, cook food and for the production of many materials such as plastics and much more. But they need hundreds of years to form. No doubt the world is very vast and we have a vast existence of fossil fuels but the world’s population is dominating the vast empire of fossil fuels. The increase in population