Cost of Higher Commodities

We're getting awfully close to the point where commodity prices are going to be having a net positive effect on the budget of the average American in 2008.  In the chart below we calculated the '08 price change of the major food and energy commodities in the CRB index (Corn, Soy, Wheat, Cattle, Hogs, Oil and Natural Gas) and multiplied the changes by the annual per capita consumption of each item.  While this method may oversimplify the actual costs, it provides a good idea of how changes in commodity prices have impacted consumers wallets this year.

Since peaking at a cost of $4.77 per person per day ($1700 per year) on July 3rd, the average cost of higher commodity prices in 2008 has decreased to just an extra 36 cents per day per person, or just $131 per year.

click to enlarge

Comments

[phdinsuntan...:]

sadly that the prices are sticky and no significant transfer will go to the consumers, that can lead to a good retailers performance!

2008 Sep 10 05:06 PM

[Jason Rines...:]

So it's good news to the average joe he/she is only paying an extra $1,800 per year now? My household budget for food and energy alone increased $4,200 annual this year (so far) and we didn't add more steaks or turn up the thermostat, that is for sure.

2008 Sep 10 05:16 PM

[Jason Rines...:]

The point above was wages have not kept up with inflation, not even close.

2008 Sep 10 05:17 PM

[Stone Fox C...:]

The really good news for the market is that the avg cost has dramatically dropped from Q2. The market is basically priced at those levels. The news from FDX speaks to that on a business level. Already seeing the reduced costs flowing to the bottom line.

2008 Sep 10 06:31 PM

[MellowGuy:]

The graph has the wrong scale on the left.

The amount mentioned is per capita, not per family and only includes some of the market basket.

2008 Sep 10 06:53 PM

[Eagle-Chief:]

As I said before, you men are men of few words...

However, your statistic above about the daily cost of commodities seems ludicrous. Commodoties have fallen. Yeah, we know that. But to say that the daily increase in cost of commodoties have fallen from $4.77 to 36 CENTS per person is UNBELIEVABLE. You dudes are surely gullible. Surely, you must have taken this info from the massive propaganda/fraud machine that is pouring out of the U.S. Government Office of Misinformation.

Yeah commodities have fallen, but to think the increase in commodities has fallen from $4.77 to 36 cents is foolish.

Try disseminating some intelligent information boys. And maybe something a little more subsantive.

2008 Sep 10 07:21 PM

[dlaw:]

Nice graphic.

Can I borrow it?

2008 Sep 10 09:51 PM

[NOWHEREMAN:]

Do you really accept the "pass through" concept. Give me a break. Corporations have been eating inflation for years, they are not about to pass their saving down to the conumers.

2008 Sep 11 09:41 AM

[The Saved S...:]

Eagle-Chief,
The graph is NOT a TOTAL daily cost of commodities per person. It is how much the total cost has CHANGED since the begining of the year (note how it is $0 there and then goes negative for a short while). So this year it cost each person an EXTRA $4.77 at its peak in July. We are now almost back to where we were at the begining of the year.

I would like to this graph since say 2000 and see how it looks. A ball park figure of what the total daily cost per person, or the change caluculated as a percent increase would be nice too.

2008 Sep 11 11:23 AM

[Jason Rines...:]

That is a valid point. The difference of course is in Consumer Staples such as food and energy and housing costs. This was of course passed through the last few years. Food prices remain sticky. For the average consumer, $3.50 gas (or $4.00 vs. $5 heating oil) vs. $4.00 helps.


On Sep 11 09:41 AM paultaut wrote:

> Do you really accept the "pass through" concept. Give me a break.
> Corporations have been eating inflation for years, they are not about
> to pass their saving down to the conumers.

2008 Sep 11 03:31 PM