Mama mia! Pasta prices soar
Floods in North Dakota are creating a bottleneck for grain used to make noodles, causing price disruptions.
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:
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.
"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.
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!
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.
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
LATEST BLOG POSTS
The Consumer Financial Protection Bureau's complaint database highlights the worst problems people have with collectors.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'