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Kraft Foods Says More Price Increases Coming

10 February 2011 4 Comments

Egyptians are rioting because of food prices, and Kraft Foods today said that the previous price hikes have not been enough and that we should expect more this year.  Food inflation.  It is here.  But, Ben Bernanke says that inflation is nonexistent so who do you believe?  Ben’s words or Kraft’s actions?  Read more here.

4 Comments »

  • Bowmanave said:

    they have to raise prices as obama sits on his @#$% watching gas prices rise, then his counterpart criminals in the epa want more ethenol in gas as they have families selling corn. it takes more to produce 1 gallon ethenol than to produce 100 gallons of gas. however obama and his people who have invested in ethonal will never tell u that. it is time to make america white again and get rid of the non american beliefs

  • Alex said:

    Time to make America white again? Classy. Or sad. Yea, sad is what I'm looking for.

    And there really isn't much Obama can do about gas prices really. He could reduce taxes I suppose but we have some of the lowest gas taxes around as it is. Other than that it's a global commodity; America has little to no control over it's price.

    And your 1 to 100 comparison is way off. Most of the reports I've read tend to say there is a slight deficit to a slight gain in efficiency of ethanol to gas. Also, ethanol is about not having to buy non-domestic sources as energy as it is about cheaper gas.

  • Ragnar said:

    Alex, i think you and Bowmanave are talking past each other on the topic of ethanol 'efficiency'.

    By saying that it takes more to produce 1 gallon of ethanol than 100 gallons of gas, i *think* he's describing the production energy loss. Functionally, producing gasoline from ol' dino juice is very energy efficient while producing ethanol is generally an inefficient process and study's have shown without subsidies *and* government mandates to blend ethanol in gasoline that the business model doesn't make sense. Even then, many ethanol plants have gone out of business in the last few years.

    The efficiency gain in ethanol and gas that I believe alex is referring to is the the efficiency in burning it in an internal combustion engine. This is true that it very slightly improves efficiency at low concentrations (<5%) as it is a chemical source of oxygen in an air breathing (as opposed to forced air) reactor (your car's engine). At concentrations greater than 10 or 15% (I forget which), the efficiency begins to drop off, so that as you approach 85% ethanol (E85 or "Flex Fuel"), the low BTU content of ethanol as opposed to C8H18 (Octane) results in a reduction of efficiency of about 30%.

    The theory goes among political circles is that food based ethanol is just a bridge to cellulotic ethanol. Why do we need a bridge? To make sure there's enough economic incentive to invest in the R&D required to make commercially feasible cellulotic ethanol. In theory, if the cellulotic ethanol were to take off, it would have a significant impact on the volume of oil we import (although it would NOT decrease our gas prices, a common misconception. If prices of gas fell, the economics of these complicated facilities wouldn't work).

    The hope is that the increasing ethanol mandates (the government is currently debating increasing ethanol mandated content to 15%) is to 'get ahead' of the rising global food prices. If we take the pain now, we can get the cellulotic ethanol off the ground and it would functionally put a cap on rising food prices as there'd be an economic competitor to corn in the ethanol realm. If global food prices continue to rise aggressively, people will demand we lower our ethanol contents, killing incentives to develop the competitive feed stocks and increasingly dooming our trade imbalances with oil producing countries.

    BTW, I do believe inflation numbers are strategically and purposefully understated, but I commented on that under "The Economy is improving" article.

  • copywriting blog said:

    I think he is, yes!