Smart SpendingSmart Spending

Mama mia! Pasta prices soar

Floods in North Dakota are creating a bottleneck for grain used to make noodles, causing price disruptions.

By MSNMoney partner Jun 28, 2011 10:08AM

By Jeff Reeves, InvestorPlace


What do pasta prices have to do with the flooding in North Dakota? Plenty.

 

According to Bloomberg News, North Dakota had finished planting only 44% of its durum wheat crop as of June 19. Usually the planting would be done by now. Flooding has forced thousands of residents to flee parts of the state, which produces more than two-thirds of the U.S. durum crop, a key ingredient in pasta, couscous and a host of other grain-based staples in consumer cupboards.

That means higher prices will be eating into grocery budgets very soon.


Food companies -- including Kraft (KFT) with its iconic blue-box macaroni and cheese and Campbell's (CPB) with its chicken noodle soup -- will feel the pinch. So will restaurant chains that use durum, including pasta-loving Italian restaurants and Chinese buffets that use the grain in noodles and batter. Post continues after video.

Of course, food price inflation is not exactly news. People around the world are already facing rising retail prices at the grocery checkout because of runaway inflation on things like milk and beef. But until now, pasta was considered a convenient, low-cost nutritious meal for people on tight budgets. Now add spaghetti and penne to the growing list of pantry items that have suffered inflation. 

Canada, the world's largest durum supplier, won't be able to do much to help the beleaguered U.S. pasta industry, because it has problems of its own. Large volumes of rain in the county's Bread Basket region have left more than 6 million acres of farmland unseeded, according to the Canadian Wheat Board. This has pushed prices of Canadian durum up by 46% since late May.


Consumers are already feeling the impact of higher commodity prices in other foodstuffs. Campbell Soup is one of many companies that have raised prices because of higher commodity prices.


For lovers of Italian food, the recent pasta problem is just adding insult to injury. Tomato prices have soared in recent months, creating a crime wave caused by what The New York Times dubbed "a ring of sophisticated vegetable bandits."

Who knows, maybe spaghetti swipers aren't too far off.

More on InvestorPlace and MSN Money:
32Comments
Jun 28, 2011 11:56AM
avatar
On top of this, the issue is corn.  The US Government is subsiding corn and the corn used for ethanol production.  It is more lucaritive to plant corn than another crop, so it causes a shortage in other crops.  The more of the demand for corn, the higher the price.  Corn is used in everything from cereal to soda pop.   When soda manufactures pay more for corn, the price of soda goes up.  Same with cereal.  Congress needs to stop subsidizing corn.
Jun 28, 2011 12:46PM
avatar

We start gardening for our self for awhile,we can change this.

 

Jun 28, 2011 12:13PM
avatar

Mr. Reaves,

If you check the ingredient label on a box of Kraft Mac and Cheese, you'll find that their macaroni is not necessarily made with Durum Wheat.  There really should be no justification for an increase in their prices.  The price of Pasta made from Durum Wheat probably won't go up much more than 25-30 cents/pound (if that).  Pasta will remain one of the cheaper meals available.

Jun 28, 2011 12:47PM
avatar
Well, this is the year to raise prices.  Everyone is doing it.  Name a product and it has gone up in price.  The recession has gone on way too long.  Oil prices have gone way up.  Inflation is all over the world.  Bad weather has stifled planting.  Cats living with dogs. (I love that line from Ghostbusters)  Anyways,  prices on everything are up and there's not a thing we can do about it but shop wisely.
Jun 28, 2011 12:32PM
avatar
I have to go along with "someone"! Gas prices have made the price of everything go up! I do most of the shopping in my household and have noticed the prices going up on everything from cereal to meats and produce! It is quite logical, as it costs these companies more money to get their products to market, not to mention other fuel related issues in production!
Jun 28, 2011 12:27PM
avatar
This is just an excuse.  A bag of Flour $3 + Dozen eggs $2 = 12 dinners or 50 cents a meal.  Equivalent pasta (not as good but best u can buy) from the Grocery Store $4.50 a meal.  So it is 10 times as expensive.  Sounds like a load of garbage.    And for those who complain about "cost of pasta maker and time".  My pasta maker is 20 years old ($2 a year) and It takes me $20 minutes for dinner for 2 (same time to get the water boiling). 
Jun 28, 2011 11:46AM
avatar
Well, guess we can't blame Obama for the weather but, then again, we can't blame Bush either! Maybe we should somehow just conduct a "Straw Poll", with grain involved somehow? Hmm.....
Jun 28, 2011 1:31PM
avatar
I've been telling people for some time to start stocking up of food. You can't go wrong with having extra. Pasta, beans and rice can last up to two years on your shelf. It's something you'll be needing anyway, so why not buy extra now, while it's cheap. If the system collapses or inflation hits, at least you won't be wondering where your next meal will be coming from.
Jun 28, 2011 1:39PM
avatar
What I do not understand is the inflation rate shows so low at 2%. In the past 6 months most staples in my area have gone up 20-30%. I am now paying 2.75 for milk and it was 2.00, ground beef was 2.00 now 2.99, soda was 4.00 now 5.50, beer was 11.99 now 14.99. Some if it was due to the great Gov. of Illinois raising taxes on everything. I can give many more examples but how can they say its only 2% and if you factor in the price of gas it has to be near 20% average increase. Guess we have to move out of Illinois like a lot have already.
Jun 28, 2011 1:17PM
avatar
Wait to the day when bread will cost a full day wage...People better stock up on dry food its going to get nasty years ahead..
Jun 28, 2011 2:30PM
avatar
K65 said:

"If it ain't there....it can't go to market!"

 

Yes, and that brings up the farm subsidies, paying farmers (and politicians and wealthy folks  that own large blocks of farmland) to NOT plant a crop, therefore artificially inflating the prices for things like corn, soybeans and cotton. Basically we pay them to do nothing. I'd rather pay them to grow those crops and give those crops to the elderly, poor and homeless, removing a certain margin of the food stamp monies from the budget.  They used to do that years ago with cheese and rice. Food surplus. But what rich guy or politician really wants to grow anything when they just buy up the land for profit from our pockets. That's why the subsidies still exist. Not to help the farmers, but to help the wealthy get wealthier.

Jun 28, 2011 1:16PM
avatar
Someone- I believe WALTER is being sarcastic! Of course Obama IS killing this country with his ill advised Socialist policies, which is why he definitely needs to be voted out in 2012!
Jun 28, 2011 1:10PM
avatar
WALTER ARE YOU BEING SARCASTIC OR ARE YOU SIMPLY OBLIVIOUS? EVERYTHING IS GOING UP IN PRICE, COMPARE PRICES FROM A YEAR AGO. RU4REAL, I STAND BY MY COMMENT THAT OBAMA AND HIS POLICIES ARE A MAJOR FACTOR IN THIS INFLATIONARY PERIOD.
Jun 28, 2011 1:20PM
avatar
THE FED (BERNANKE) HAS DEVALUED THE DOLLAR THREE TIMES IN THE LAST THREE YEARS, CALLING IT QE (QUANTITATIVE EASING) WHEN MONEY IS WORTH LESS THEN PRICES RISE. THE IDEA IS FOR US NOT TO NOTICE THAT OBAMA AND HIS POLICIES HAVE FAILED MISERABLY, CAUSING INFLATION AND HARDSHIP ON THE AMERICAN PEOPLE. NOW PELOSI THINKS THAT THE GOVERNMENT SHOULD HIRE THE UNEMPLOYED, RAISE TAXES ON US THAT HAVE A PRIVATE SECTOR JOB TO PAY FOR THOSE GOVERNMENT JOBS, WHICH WILL CAUSE THE ECONOMY TO IMPLODE. GOVERNMENT DOES NOT HAVE MONEY TO SPEND UNTIL THEY TAKE IT FROM US IN THE FORM OF TAXES AND WE ARE TAXED ENOUGH ALREADY.
Jun 28, 2011 1:03PM
avatar
But there is no inflation..........
Jun 28, 2011 2:22PM
avatar
Stan, the reason the inflation rate only shows 2% is because the guys setting those things (just like presidents and congressmen) are so out of touch with the real world. They don't do their own shopping, they just make a guess. That's why this year they said there was no inflation at all, so the elderly on social security wouldn't get any cost of living increase. Yet they've taken away many medicare benefits, so most of the elderly are now paying over $350 each per month for their medical insurance. However, if they'd never worked a day in their lives, they'd still be collecting welfare and getting their healthcare for free through medicaid.  
Jun 28, 2011 1:49PM
avatar
JUST THE BEGINNING!!!! PRETTY SOON WE WILL ALL BE ON WELFARE GETTING HANDOUT FROM THE GOVERNMENT.
Jun 28, 2011 1:32PM
avatar

These increases aren't about politics and they aren't about religion, they are about Mother Nature and the hand she had dealt us!

 

When crops don't get planted or yields aren't up to par, we all suffer the higher prices.  And don't forget that oil/gasoline has gone up too.  And that means that any farming activity is costing more as well as transporting the crops to market!

 

I think a lot of people who post on this board & other boards should have stayed in school longer or paid more attention while they were there.  They also probably should have taken some different classes so they would understand how our supply chain works!

If it ain't there....it can't go to market!

And this is just the beginning!  Other countries around the world are also having crop failures do to weather conditions too!  Read!  Learn!!

 

Am I ever glad I plant a garden!  Learn to feed yourself!

Jun 28, 2011 1:20PM
avatar
One little State feeds the whole Country.They have to blame some one for the price increase..Eye-rolling
Jun 28, 2011 1:09PM
avatar

Casandra of Troy got it right.

 

This is all an excuse to raise prices far beyond the price of the product the farmer receives.

Wheat brought $2 a bushel in 1950 and is NOW still only $7 a bushel.  Compared to wages and the overall economy that is almost no increase.  And remember a bushel of what is 60lb of grain.  Anybody out there who has even researched these issues or do they just rely on the MSM and their cohorts for their lack of information.

 

If wheat doubled in price tomorrow it would make very little difference  in the actual wheat product used to make pasta.

 

And as for the comment about corn being the problem.  That is absolutely ludicrous.  Wheat prices are not even the problem, let alone the corn issue as related to pasta.  How any person can dream up this illogic is- well it takes an active imagination and little knowledge of the topic at hand.

 

And for this comment to get so many positives only shows the ignorance of so many.  Yes, I expect a lot of TD's because the truth hurts.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More