Another Harbinger?

Last Saturday I was dispatched to the local big-box retailer to acquire additional storage containers for the 1,000 dozen Christmas cookies my wife and her friend were baking. While standing in the express lane, I noticed that the woman in front of me was charged $1.50 for a 20-ounce bottle of soda. I don’t buy 20-oz bottles too often anymore, but I could have sworn that I was paying around a buck or maybe $1.20 per bottle no more than a year ago.

Considering that the main ingredient in most sugared sodas (other than water) is high-fructose corn syrup (i.e. one of the most heavily-subsidized food products in the country), this seems like an unusual spike in prices. Perhaps another area ethanol production is starting to impact?

I keep trying to break my soda habit, but I have got a bad case of addiction to refined sugar. I quit and then fall off the wagon several weeks or months later. I’m not helped by the fact that my company subsidizes the soda machines at work, so I can get a fix for a quarter. Breaking my sugar addiction will be one of the things I’ll put on my new years’ resolution list….

Advertisements

4 Responses to Another Harbinger?

  1. Rebecca says:

    I’ve seen 20 oz bottles going for almost $2 each here. There’s a definite spike in prices.

    As for the soda addiction, I used to have it as well. The key to breaking it for me was going slowly, stepping the consumption down one notch at a time. ‘Cool turkey’ rather than ‘cold turkey’ as they say back where I come from (though referring to other stimulants much more potent and much less legal than soda).

  2. Bart says:

    Yeah, I’ve weaned myself off of soda for a while then always come back. I now realize that my addiction (such that it is) is to the sugar and not the caffeine. I’d stop drinking Coke for a while and then I’d find myself starting to roam the halls in search of candy bowls, etc. Kind of pathetic, I know, but it’s the truth.

    Starting next year I’ll need to take a serious look at reducing my intake of HFCS & sucrose as much as possible.

  3. BT ga econ says:

    Hello old friend I decided to check back in on you and am compelled to comment on the first thing I read. As for soda prices, if you notice when you by the 20 oz bottle at the front of the store it is significantly more expensive than similiar 20 oz bottles in gas stations or vending machines. In addition I don’t know if you have seen these signs in your area but there has been a rise in soda prices but the coca cola company as said that this is a due to a rise in their transportation cost caused by fuel prices. ( Which in a perverse rejection of your current theory would be even higher if ethanol were removed from the market) Now I’m not saying ethanol hasn’t effected corn prices and in turn will change HFCS prices I just don’t think that it is the factor behind this particular observation.

  4. Bart says:

    Welcome back!

    There are a number of factors in play, of course. I’m sure that transportation costs are playing their part in rising prices for soda, as is the decline in the purchasing power of the dollar over the last 6-12 months. For what it’s worth, the local gas stations are listing prices for 20-oz bottles in the big coolers in the back of the store around me at around $1.40-$1.45 per bottle in recent weeks. A year or so ago $1.09 – $1.20 was the norm I think.

    As far as the whole removing-ethanol-from-gas-would-raise-prices-even-further bit, I would counter that the amount of ethanol in use today in the US is a very small percentage of the total amount of transportation fuels used in the US. Some quick Google searching gives me the impression that ethanol makes up somewhere in the range of 3-4% of the USA’s overall transportation fuel supply. Here’s one link that sums up things concisely:

    http://www.theoildrum.com/node/2615

    It’s only one source, yes, but the author of that piece has done her homework IMO. So yes, while removing ethanol from our fuel stocks would affect gas prices, I don’t think it alone would force prices up that much.

    There’s also stories like this popping up about what *may* happen if new bills are passed into law:

    http://money.cnn.com/2007/12/07/news/economy/biofuels/?postversion=2007120711

    Quote:

    “But it’s clear the biofuels mandate, which calls for 15 billion gallons a year of corn-based ethanol and another 21 billion gallons from “advanced biofuels” that use other plants besides food crops, will drive up the price of corn.

    With it, the price of other corn-dependent products like chicken, pork, or items that use corn syrup, like soda, which have already seen an increase, are likely to rise further.”

    ——–

    There are other parts of that story that downplay the idea that increasing ethanol production will affect end-consumer food prices… I brought up this quote because it’s pertinent to the discussion at hand.

    So yes, rising ethanol production may spur food inflation more than other factors, or it may not… There are a number of variables in play and we’ll just have to see what unfolds.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: