The Shopping Cart Economist

Here’s a quick link to where I have my backyard pictures posted. This was early in the season. http://www.hotcouponworld.com/forums/members/hotcouponmama-albums.html

When all’s said and done, we got about:

75 ears of corn (which where the best ears we had all summer)
a dozen or so cucumbers
8 pumpkins
a few dozen apples, which was amazing for a first year planting
oodles of fresh lettuce
lots of basil
several pounds of blueberries - again, first year in the ground so I was pleased
30+ pounds of yellow squash
lots of tomatoes (still getting them, plus lots of green ones on the vine)
4-5 full stocks of celery
dozens of peppers of all kinds
a pint of raspberries
assorted beans and peas, enough for several dinners worth for us and guests
egglplant (which we don’t eat but my MIL was thrilled to have)
There’s a few dozen butternut squash about to be ripe as we speak
and then I should have carrots in a few weeks.

Got some potatoes in the ground so cross your fingers they pan out - I’d love to have potatoes this winter.

And then the citrus trees have given me grief, but I should be getting some lemons here soon. I shocked the hell out of them when I transplanted them early on and they dropped a lot of fruit - I was devestated.

For next year, I have one more 5x5 box I didn’t get to use cause the house wasn’t painted yet, as well as 6 smaller 2x3 boxes. I might even get a few huckleberries this fall….

Next up is to get the shelving in the greenhouse and I’m going to see how much I can grow in there this winter. The boys have really loved having fresh lettuce and lettuce in little 1 gallon containers works really well.

All and all, a very worthwhile use of my economic stimulus dollars (thanks George W) and with the current state of the economy, a prudent investment in the health, and financial well being, of my family overall.

Cheap food isn’t cheap anymore. Look around. The things we used to think were cheap (soda, snack foods like chips and candy, juice drinks) have taken a huge price jump in the last two years. As gas rolled up over $100 a barrel for a moment right as we started the new year, it’s easy to look at energy costs as part of the problem with food cost increases, but certain ingredient costs, even with government subsidies (like corn) are also driving costs.

Let’s look at high fructose corn syrup (HFCS) as Part I of this series. HFCS is the key ingredient in literally THOUSANDS of products from cereal and soft drinks to cookies to kids’ juice boxes for school lunch.

Traditionally, manufacturers have used HFCS because it’s nearly 3x cheaper than sugar. And of course, the it’s been a big boon to US corn growers. US farm subsidies of corn is going to be roughly 11 Billion dollars this year, and corn receives the lion’s share of all farm subsidies.

Of the 10 billion bushels of corn produced, 5% will go into producing HFCS. At about $4 a bushel, that makes corn production for HFCS worth over $200M and double what it was two years prior. In about a 20-year span, US consumption of HFCS has gone from nothing to over 60 pounds per person per year on average. At 4 calories per gram (453 grams in a pound), that’s nearly 300 calories a day being consumed by the average American.

HFCS is the sole sweetener for 99% of the beverage industry. In fact, for many beverages, it’s the first listed ingredient. So if the price of the main ingredient has doubled, it’s no wonder we’re seeing a significant increase in the cost per serving. And while it hasn’t slowed down consumption (Coke’s shareholders enjoyed about a 23% return on investment last year), the price has jumped the price significantly. Two years ago, a 20z bottle of just about any carbonated soft drink on the market was .99c and could be had on sale for less. This year, most 20z bottles are $1.49, an increase of about 50%. And 12-pks went from $2.99 to $5.49. That’s a huge increase, and in the long term, will begin to price out consumers. (Note that I don’t think that’s entirely bad since liquid calories is a likely culprit to obesity problems in this country).

Of course, we have to attribute transportation costs to rising food costs, but in the case of HFCS, corn-based ethanol is a direct competitor driving up the cost of corn prices, so a double whammy for the food manufacturing community in product costs. Nearly 25% of the corn produced this year will be headed to ethanol refineries (a whole other quandry in and of itself). The World Bank has estimated that the amount of corn needed to fill an SUV tank up is enough corn to feed a person for a year. So while corn-based ethanol looks good as an alternative fuel, that stat coupled with the return on energy investment to produce ethanol is starting to look like it isn’t worth the effort. But that has yet to stop corn prices, and subsequently, food prices, from rising.

There’s a lot of politics around HFCS vs. cane sugar that I am just not going to get into right now, but switching sugar types just isn’t likely going to happen in US food manufacturing. And if corn prices continue to rise, and corn continues to get diverted to fuel production, we’re going to continue to see increases in every product that lists HFCS as an ingredient.

Welcome to the Shopping Cart Economist. I’ve been dying to start this blog for some time now, mainly because I think there’s a story to be told around food and household goods. Consumers for the most part are somewhat arbitrarily buying groceries without understanding what’s happening at the store. Truth be told, there are probably many that really don’t care or don’t want to be bothered with it all. But here’s the rub…these same consumers can’t understand why their take-home income is no longer stretching the way it used to and they haven’t yet attributed it to the fact that the shopping trip that used to cost $100 has jumped to $200.

Most of us would never think to track retail price change in the grocery sector. But interestingly enough, there is no other business model that represents nearly every industry sector all under one roof. The best place to track the where the economy is headed is to watch what’s happening at the store and look at the “why” behind the change. How many other industry sectors have experienced the rapid price increases like the grocery store has? In the last year, we’ve seen some items jump as high as 55%. Have you seen the price of eggs lately?

There’s a change coming, and I can’t really describe it yet, because I am frankly not sure what it’s going to look like. I do know that our food economy can’t continue to out of proportion to what’s going on in the other economic sectors. Some of the change will bring a push to more local foods; another aspect will be product availability and resource scarcity. Whatever the change is going to be, it’s going to make for an interesting conversation.

The Shopping Cart Economist is really about tracking what’s going on in the global economy through this grocery store umbrella. As I mentioned earlier, nearly every major industry is represented at the store - agriculture, transportation, supply chain management, hardware and software technologies, marketing, advertising, printing, real estate, construction, refrigeration, manufacturing, processing/packaging, product development, and the list goes on and on. All of these work-types are interdependant, so when one falls, the change can be seen on the shelf tag at your local store. My goal is to help consumers understand where the change occurred, how it affects the price of an item, and where a consumer might better substitute, forego, or otherwise stock up on an item if the price is right.

A little bit about me…..

I’ve been tracking price changes at the store for about 10 years. The driving forces that are causing these changes fascinate me. Besides watching the prices, I am also a bit of a deal hunter and coupon shopper. It pains me to pay full price for an item I can get on sale if I simply watch for the best deal and buy while the getting’s good. To that end, I publish community forums for shoppers who are looking for deals on both conventional and organic groceries and household goods. We have about 20,000 members from across the country, and nearly every major store chain is represented and discussed.

Personally, I am married with three kids (so I spend a TON of time in the store). I have a communications degree from Southern Oregon University, and I have an MBA from Marylhurst University in the Portland, Oregon area.

I look forward to getting to know some of you through the blog, and I would encourage you to visit either store forum: www.hotcouponworld.com & www.organicgrocerydeals.com.