Why the Breakfast Index Isn't Good for You

By Brad Zigler

Breakfast is the most important meal of the day. At least according to June Cleaver and her ilk.

Important it may be, but it may not necessarily be tasty.

Numbers released by the Bureau of Labor Statistics' latest consumer inflation numbers fell in line with the eport of wholesale price increases. Prices, as measured by the Consumer Price Index, rose 3.1% on an annualized basis, led by a 5.3% hike in food prices and an 8.6% rise in energy costs. The 10.2% annual growth in the Producer Price Index announced was, um, fueled by a surge in energy and food costs.

The tale at the breakfast table this morning is a little different. The back-of-the napkin Breakfast Index (see last month's reading in "The Breakfast Index: Drink Up") indicates a preponderance of falling prices over the measuring period used by the good folks at BLS.

 

March 2008 Breakfast Index

Commodity	Contract Month	31-Mar-08 Price	31-Dec-07 Price	3-Month Change (%)	Annualized Change (%)
Sugar #11	May ‘08	11.69 ¢/lb	11.12 ¢/lb	5.1	22.1
Cocoa	May ‘08	$2,321/tonne	$2,038/tonne	13.9	68.5
Coffee	May ‘08	127.40 ¢/lb	138.75 ¢/lb	-8.2	-29.0
Wheat	May ‘08	$9.29/bu	$8.93/bu	4.0	17.0
Milk, Class III	May ‘08	$17.32/cwt	$16.54/cwt	4.7	20.2
Pork Bellies (Bacon)	May ‘08	67.50 ¢/lb	87.60 ¢/lb	-22.9	-64.8
Orange Juice	May ‘08	109.65 ¢/lb	146.35 ¢/lb	-25.1	-68.6
Butter, AA	May ‘08	138.50 ¢/lb	142.00 ¢/lb	-2.5	-9.7
Average				-3.9	-5.5

 

Oh, today's breakfast didn't cost you less than it did three months or a year ago?

Perhaps this'll help explain why: Weight the index by prices as is done in the Dow Jones Industrial Average. Figured this way, breakfast commodity prices rose over the first quarter by 8.2% for an annualized inflation rate of 37.3%.

Now that's better, isn't it?

 

Comments

[sbenard:]

Ugh! No one can any longer afford to break the fast!

2008 Apr 20 11:37 PM