Hard truths about wheat costs

Yesterday, we experienced the cold, hard truth about food costs.

Last year, on June 30, 2007, I purchased a 25-pound sack of flour at Costco. Just all-purpose flour. Nothing fancy. It cost $4.79, or $0.19 per pound.

Yesterday (June 3, 2008), I purchased the exact same product. It cost $8.49, or $0.34 per pound.

That’s a 79 percent price increase in just one year.

This is why we need to grow our own veggies — so we can continue to afford flour.

According to an article from CNN, wheat prices have soared in the past year because of:

  • Ethanol. Corn is competing with wheat for field space.
  • The weak dollar. Other nations are snapping up our food supply, and 59 percent of U.S. wheat is being exported.

One thing’s for sure: We are experiencing weird economics like I’ve never experienced in my adult life. It reminds me of my parents’ and grandparents’ frightening cycles of the 1970s and 1930s. Hopefully, it’s all a cycle, and this too shall pass. But meanwhile, be very kind to your local bakery owner, because they are feeling an intense pinch right now.

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6 thoughts on “Hard truths about wheat costs

  1. Melinda says:

    For what it’s worth, my grandfather (last November) likened this cycle to the one in the 30s. He’s a self-taught 97-year-old Republican who has survived and thrived by adapting to changes in the economy over the years.

    I’d add a third reason to your list: the higher cost of oil, which has increased pesticide, transportation, and storage costs.

  2. cheaplikeme says:

    @Melinda – I’m sure you’re right – should have included oil! I don’t know why the article didn’t, except that the “supply” factors are probably more economically significant. But the oil issue is hitting everything.

    @Nan – What do you mean? Do you think “going green” is affecting wheat prices? Or just making us aware of how we suffer?

  3. sam says:

    I don’t even know where to begin cheap… this is all crazy!!!! The economy is forcing me to really look at where our hard earned money goes and try to be as frugal as I can be. The cost of flour is insane!!! Just a thought, but have you tried your local Aldi’s. You would have to buy more bags, but I imagine it may be a bit cheaper. On a side note our local gas prices went up 13 cents in one day… 13 cents!!! I remember when gas was 99 cents…
    Sorry for the mini-rant!
    Sam @ Loving Green

  4. cheaplikeme says:

    @sam, I don’t know what Aldi’s is … don’t have them here in Colorado! I know the flour from Costco was a lot cheaper when I compared last year … but like I said, I haven’t bought all-purpose in a year. I think the cheapest I saw last year previously was $1 for 5 lbs., which is still $0.20 a pound — but I haven’t seen a sale in a long time. I guess it’s worth watching for, though!

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