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Inflation?

My favorite jelly has shrank the jar by 1 ounce and raised the price $0.79. My favorite cereal doesn't come in a family size any more and the standard size has shrank 2 ounces while the price remained the same. Meat keeps creeping up in price, eggs, milk, bread.

I keep on reading in the news there is no inflation, I'm wondering if the inflation I'm seeing is regional/local. Is anyone else seeing inflation?

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  1. Honestly I think this trend started at least 10-15 years ago when a 1lbs. can of coffee became 14 or 12oz. without the price every changing.

    Receiving less for the same price is suppose to be considered stability of pricing. Welcome to the new world order.

    4 Replies
    1. re: jrvedivici

      Trend goes back way farther than 10-15 years. The paleontologist Stephen Jay Gould wrote and essay entitled "Phyletic Size Decrease in Hershey Bars" http://math.uprag.edu/PhyleticSizeDec... Included is a graph tracking this practice back to at least 1965.

      1. re: kmcarr

        That's a really interesting essay, thanks for linking it.

      2. re: jrvedivici

        <Receiving less for the same price is suppose to be considered stability of pricing.>

        That is just because of marketing. It is easier on the consumers to pay for a smaller box than to pay a higher price. The prime example is that airlines are charging you for luggage and food now. From a marketing point of view, it is easier to reduce service than to increase price, especially because of internet price search.

        You said it. New world. -- not sure about the order part. :)

        1. re: jrvedivici

          I know what you're saying and accept that inflation is a fact of life, but at the same time, the way inflation is calculated by the BLS has changed and these changes are not being factored when media reports that inflation is low/negligible. That's my main gripe.

          I'm not just talking about how "volatile" components like food and fuel have been stripped out of the "core" inflation. I'm talking about substitution e.g. chicken was $3/lb and beef was $5/lb now beef is $7/lb and chicken is $5/lb, no inflation per BLS.

        2. Of course we are... :( They've been doing it for my entire life - products gradually shrink and prices rise until it gets to the point where they introduce a 'new value size' and the cycle continues ad infinitum. And so it will be until the end of time...

          1 Reply
          1. re: Kajikit

            I just want my family size back. Buying many boxes of cereal with small amounts of cereal in them is a waste of packaging.

          2. <I keep on reading in the news there is no inflation>

            Inflation is low, not that there is no inflation.

            http://2.bp.blogspot.com/-X-sfJ7jJ8zA...

            6 Replies
            1. re: Chemicalkinetics

              What does inflation have to do with capitalistic greed?

              Seriouslly, even if it isn't greed, fuel prices go up, labor prices go up, anybody with a big ag concern probably has to invest in more technology to keep up. The list goes on, and people at the end of the chain have to pay more or do without.

              And then there's greed.

              1. re: EWSflash

                You are correct. Inflation actually has nothing to do with capitalism. It has existed prior to capitalistic societies. There are many factors for inflation, but the most basic drive for inflation is simply that "today's money" worth more than "tomorrow's money".

                Let's say I buy a car from you, and then I say to you: "I can pay you the $30,000 right now, or I can pay you the $30,000 ten years from now. What do you want?"

                Almost everyone will prefer the $30,000 today. This attitude is the reason why inflation exists. The value of money decreases as a function of time.

                As Veggo has pointed out at the bottom, a deflation or a non-inflation economy is actually very harmful.

                http://chowhound.chow.com/topics/9284...

                1. re: Chemicalkinetics

                  "But I'll gladly pay you on Tuesday for a hamburger today."
                  -Wimpy, 1954.

                  1. re: Veggo

                    I will gladly pay you New Years for a hamburger on Christmas.

                     
                    1. re: Caroline1

                      For you darlin', cheeseburger, all the trimmings, no IOU!
                      Merry Christmas!
                      Veg

                      1. re: Veggo

                        Done! I'll bring the French fries and milk shakes! Have yourself a wondrous Christmas dinner, and drink merrily! Glad yul :-)

            2. I'm sure noticing it too. Beef prices are awful, the bag of egg noodles I bought were only 12 oz instead of a pound, and that's just the start of it.
              The govt lies, about everything!!

              1 Reply
              1. re: Nanzi

                This is the worst I've seen inflation manipulation, it pumps the GDP numbers and lowers social security payouts.

              2. I'm probably going to regret wading in but here goes.

                Headline inflation is low. Food is only a component of overall inflation figures. Cost of food is actually very volatile. That's why there is a separate measure of CPI ex food and energy which always leads to the overused line about who lives without food and energy. Any who.

                This will bore the tears out of most of you, but here goes.

                Last year if you recall, there was a very poor growing season in the US and the major commodity crops had low yields. The price of wheat/corn/soy soared. That resulted in price increases down the food chain. One of the effects was that the price of feed for cattle skyrocketed. Ranchers could not afford to feed their herds so there was significant culling of the herds in 2012. That resulted in a collapse of prices in the meat markets as the slaughterhouses were very busy. Price of beef/pork hit very low levels but we have probably all forgotten about the great prices on meat from last summer's cookouts.

                Other products that used grains would have started a slow trend upwards as many users hedge their cost structure through the use of futures contracts. The futures market becomes illiquid much past a year. So the rise in spot prices eventually catches up to the users and they have to deal with the price increase.

                Its fairly typical response to first shrink the size of the package when costs go up as most consumers are nominal price sensitive and don't initially notice the smaller quantity. Eventually the price goes up enough for the underlying commodity that the price also goes up.

                Turn now to harvest of 2013. Its actually been a record year. Harvest of wheat/corn/soy are at levels such that the grain elevators are basically bursting. Spot and futures prices are down significantly since last year.

                What does that mean? Well things like cereal, bread and pasta will probably see a reversal and package sizes will slowly increase as prices hold steady.

                Meat prices on the other hand will continue to go up. Herds were culled last year but feed prices have dropped this year. So that means while herd sizes are being brought up this year, the number of cattle that are of age/size to come to market is down so beef/pork prices will be firm to stronger. Prices there won't be affected by this year's lower feed prices until next year. Exception to that will be chicken as new chicks can be raised and brought to market much quicker.

                This is a gross over-simplification of a complex concept.

                Today's lesson is over. Class dismissed.

                11 Replies
                1. re: Bkeats

                  "What does that mean? Well things like cereal, bread and pasta will probably see a reversal and package sizes will slowly increase as prices hold steady."

                  I'm not sure if we'll see a reversal in package sizes until customers revolt. In the case of airlines, they said they needed to charge fees for previously included services (like checked bags, food, etc.) because the industry was undergoing a rough patch and was unprofitable. Now that airlines are doing very well, very profitable, I don't see them generously sharing the largesse either with customers or employees.

                  1. re: Bkeats

                    That wasn't boring at all, and I feel a bit smarter after reading it, so thanks.

                    I made a pot roast last week and was shocked by even the sale price on the beef. Inflation kinda sucks. I've been looking online the last week at new vehicles. Wowza. Talk about inflated prices from even five years ago. It's hard to wrap my head around spending 40-ish for a vehicle.

                    1. re: KrumTx

                      We just spent less for a new vehicle than we did for our last new vehicle 20 years ago. It's smaller, but better in many respects. There are many good cars below $40K.

                      1. re: GH1618

                        Yeah, I know. I just had my eye on a Jeep Cherokee. I need to have my eye on a Prius:)

                    2. re: Bkeats

                      Bkeat,

                      Well said. I couldn't say it better. Thanks.

                      1. re: Bkeats

                        Thank you for taking the time to break this down for us Luddites, but you have made me chuckle...

                        "What does that mean? Well things like cereal, bread and pasta will probably see a reversal and package sizes will slowly increase as prices hold steady."

                        Dream on, Babe! This is a "bottom line" world and General Mills, et alii, ain't never never never gonna walk into their corporate board rooms to tell their investors they're putting more Cheerios in the box for free! But wouldn't it be nice if altruism was once again alive and well and living in a corporate board room!* '-)

                        GREAT POST!

                        *with apologies to Bill and Melinda Gates and others.

                        1. re: Caroline1

                          As a matter of fact, General Mills recently introduced a double box pack of Cheerios (each box 20.35 oz), with significantly lower cost per unit weight. They are taking care of their serious Cheerios consumers.

                          1. re: Caroline1

                            "This is a "bottom line" world and General Mills, et alii, ain't never never never gonna walk into their corporate board rooms to tell their investors they're putting more Cheerios in the box for free! But wouldn't it be nice if altruism was once again alive and well and living in a corporate board room!* '-)"

                            It's true that prices, even food prices, are what they call "sticky down," which is to say that prices match cost increases more closely than they match cost decreases. But still from time to time prices come down. It's not altruism by any means. Prices come down as companies battle for sales in a mostly competitive market. The company doesn't tell their board they're giving stuff away, they tell their board that they're taking share away from the other guys and gaining substitutions from other products.

                            1. re: nokitchen

                              This commodity game happens weekly in the petroleum markets. And your gas tank.

                              1. re: Veggo

                                ... and your stock portfolio, and your toothpaste, and you well, and your ad infinitems! '-)

                                1. re: Caroline1

                                  Today I like the Norwegian krone. Tomorrow is another day.