H McKee Stewart Jr

Musings on Business, Finance, and Economcs.

Food and Diesel Prices

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There’s been a lot of talk lately about increases in food prices. As the USDA notes, Beef prices are up 10.4% year over year in April, Dairy 6.3%, and fresh vegetables 4.5%. Fresh fruit is reasonably stable,  only showing a 1.6% Y/Y increase. Given the weather impacts, diversion of corn from a food stock to a fuel stock, and increasing demand, prices are going to go up.

But there’s an additional factor at work, the price of diesel fuel. Increased energy costs impact more than how much it costs  you to fill your tank to get to work. Given that just about every item sold in your grocery is moved by truck at some point, this 53 week trend line on the price of diesel should be disconcerting:

image

Of course it’s worse if you’re in California or in New England:

image

Now, a lot of this trend in fuel prices can also be attributed to increased demand, uncertainty surrounding the political environment in the middle east, the BP disaster and subsequent ‘permitorium‘, the overall long term trend in fuel prices is impacted by environmental concerns – the government seems much more focused on ruling out exploration and drilling than encouraging it.

Update: Here’s the DOE source for the diesel prices.

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Written by hmstewartjr

25 May 2011 at 2:13 PM

Posted in Uncategorized

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