PracticalDad Price Index:  August 2012

With the drought continuing across the US and affecting the corn and – probably – soy supplies, the word is out to expect an increase of about 3% in food prices in the next year.  While I’m not certain, it sounds as though they assume that there will be no other food increases apart from what’s happening to the national crop because of the drought.  That unfortunately isn’t the case as food continues to rise.

The results of the August 2012 basket pricing of 47 items showed that the full index declined slightly to 106.68 from July’s level of 106.77 (November 2010 = 100).  When you strip out the ten non-food components of the grocery basket however, the food-only index rose from July’s 110.32 to August’s 110.88 (November 2010 = 100). 

While there’s always some give and take, especially due to seasonality, amongst the food prices, what was notable was an 8.8% rise in the cost of Red Delicious Apples (3# bag) and and a 10% rise in the cost of a can of Dark Red Kidney Beans.  In each case, one of the three stores suddenly showed a price spike which drove the average cost upwards and I anticipate that there will be some followup amongst at least one of the other two stores in the next several months.  This is indeed the case for the stealth inflationary packaging of sugar, which has now had a second store decrease the standard size bag from 5 to 4 pounds.  While there’s a nominal price decrease, the real effect is an increase in the cost of sugar as the consumer will have to purchase more or cut back use accordingly to make a bag of sugar last the same time span.

The results of the non-food/food indices at three month intervals are shown below.

Month/Year          Regular Index          Food-only Index

11/10                    100                            100    

2/11                      100.63                       100.46

5/11                      102.08                       103.76

8/11                      104.85                       106.52

11/11                    105.56                       106.38

2/12                      104.90                       107.67

5/12                      106.49                       109.65

8/12                      106.68                       110.88

PracticalDad Note:  The summer has been busy with projects, activity and preparation for college and yes, I have written less accordingly.  Please excuse this and know that after a coming week off-line, the thoughts and articles will return in volume.  Until then, continue to have a good summer and thanks for reading!


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