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Commodity Inflation And Spare Capacity: Food For Thought

Tyler Durden's picture




 

The '-flations' are as much part of the commonplace parlance for every sell-side strategist, talking-head, and gold-bug as dividend-stock, quality balance sheet, and long-time-horizon is for long-only managers. Whether deflation, stagflation, inflation, disinflation, or reflation, they all have their moments of sublime glory. Bank of America's Economics team have found some extremely timely 'inflation' signs in the food industry, where it is becoming, somewhat incredibly in this age of supposed frugality and deleveraging, cheaper to eat-out than to cook-at-home. This price disequilibrium has seen consumers respond accordingly; spending on food away from home has picked up while spending on food at home has slowed and also very notably households spending the marginal unit of 'time' working as opposed to 'eating' as economic frailties continue.

 

BAML- US Macro Watch: Food for thought

 

When it becomes frugal to eat out

 

One of the most basic tenets in economics is the law of demand; consumers will buy more of a good when its price decreases and less when its price increases. This is becoming increasingly evident in the food industry. It is becoming cheaper, on a relative basis, for consumers to dine out than to buy their own groceries and cook at home. Consumers have responded accordingly; spending on food away from home has picked up while spending on food at home has slowed.

 

 

 

Prices at the grocer rising faster than restaurants

 

Chart 1 tells a compelling tale. According to the Bureau of Labor Statistics (BLS), prices for food at home (grocers) are advancing over 6% per year. That is roughly two-and-a-half times faster than prices for food away from home (restaurants). While this data may not line-up with what you hear from the industry, our point here is more on direction of the series. Notice that food at home is more volatile than price movements in the food away from home category. Why the divergence? Grocers tend to be more sensitive to raw commodity prices. Recall the underlying premise of our inflation forecast: spare capacity, particularly in the labor market, will constrain inflation.

 

Restaurants offset commodity pressures through wages

 

Restaurants tend to have a stronger labor component in the end-cost of goods sold than grocers. With the youth unemployment rate at 24%, restaurants are better positioned to offset higher food prices by paying workers less. Moreover, for many workers in the restaurant industry customer tips comprise a major portion of earnings. For the average grocer, end consumer costs tend to be more sensitive to raw food prices. Workers in grocery stores are also more likely to be unionized, limiting the ability of grocers to offset higher food prices through wages.

 

 

 

 

Opportunity cost to go to the grocer is rising

 

One additional point to consider is the opportunity cost to households. In this weak economic environment, if afforded an extra hour of time, a household will be more likely to work in that hour than spend that time going to the grocery store and preparing food. Again, this implies a relative shift, substituting away from grocery stores into restaurants.

 

Spending up at restaurants, down at grocers

 

With prices at restaurants rising more slowly than grocers, consumers have responded in-kind. Chart 2 illustrates this relative consumption shift. The result is predictable but telling. As a share of total personal consumption expenditures, spending at restaurants has been rising steadily since mid-2009. For grocers, on the other hand, this share has been essentially flat.

 

We can only hope that the S.N.A.P. (food stamp program) will be accepted at Masa, Jean Georges, and Daniel very soon. Though with all the extra marginal hours we will be spending working, perhaps the marginal utility of food (or true consumption) will drop to zero?

 

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Wed, 11/30/2011 - 00:56 | 1928719 trav7777
trav7777's picture

'flation, bitchez

Wed, 11/30/2011 - 01:22 | 1928785 Yamaha
Yamaha's picture

This is another bullshit report from the most mismanaged bank in the USA. This might have some truth in NYC - but for a fraction of dining out I can prepared steaks, seafoods, pasta at a fraction of the cost of dining out. I can also buy better quality basics and don't require a 15% tip!

Most people today are to lazy cook and take time for the family. I'm teaching two sons that they can have healthier and better food while dining at home. (and yes - I can afford to eat out anytime)

This is just a poor report unless you weight 400 pounds and eat every meal at McDonalds!

Wed, 11/30/2011 - 01:28 | 1928802 Akrunner907
Akrunner907's picture

So very true....and the definition of eating at home includes processed pre-packaged food, which carries a substantial premium over the raw ingredients.  

Wed, 11/30/2011 - 01:50 | 1928866 Yamaha
Yamaha's picture

Also, for those of you that drink adult beverages - why is it that the homeless folks don't buy their drinks at the local taverns? They must be paying too much at the wine/grocery store. I need to walk around the city and show them this report -

"sit your ass down and have a drink - Bank of Americas says it is the cheapest way to go"!

Mon, 05/14/2012 - 05:47 | 2422975 jaffa
jaffa's picture

Modern restaurants are dedicated to the serving of food, where specific dishes are ordered by guests and are prepared to their request. The modern restaurant originated in eighteenth century France, although precursors can be traced back to Roman times. Thanks.
Regards,
Houston restaurant

Wed, 11/30/2011 - 02:17 | 1928916 macholatte
macholatte's picture

and how do food stamps (or whatever the politically correct term is) figure into all this?

Wed, 11/30/2011 - 02:58 | 1928972 Yamaha
Yamaha's picture

The good news is that Americans will be forced into a diet plan soon.......

Wed, 11/30/2011 - 06:14 | 1929090 uno
uno's picture

Fed pays farmers not to plant and gives out SNAP cards (both driving up food prices), and we pay taxes to support this.

Wed, 11/30/2011 - 06:33 | 1929100 Potemkin Villag...
Potemkin Village Idiot's picture

how do food stamps (or whatever the politically correct term is) figure into all this?

perfect question to ask because you can use SNAP cards at many fast food establishments (which likely defines the skew)...

Wed, 11/30/2011 - 02:35 | 1928945 Lord Koos
Lord Koos's picture

Yep I don't know what universe these guys live in, but around here it's much cheaper to eat well at home... if you're eating at Mickey Dee's everyday, that's a different story. The only decent cheap meal around here is at the Taco joints.  I won't eat American fast food.

Wed, 11/30/2011 - 03:34 | 1929014 Mitch Comestein
Mitch Comestein's picture

Agreed 100%.  This is an apples to big, fat, greasy, cheap-ass burger comparison.

Is the BOA guy driving to fucking Tokyo to shop.

Wed, 11/30/2011 - 06:44 | 1929105 disabledvet
disabledvet's picture

i agree if we're talking New York City. McDonalds, Wendy's and Burger King though? 4 bucks for coffee and a bagel at Dunkin' Donuts while on the go to work. "time is money" as they say. plus if you take the kitchen out of your house that saves money. take the wife out of the house too and that saves even more! i know this much: the problem of obesity in the USA is no accident. we eat out and do not cook in. our idea of socializing is now showing up at the fast food joint and hangin' out as well. normally i'd say "this is far better than socializing in the kitchen" since you're gonna meet your job opportunities at Dunkin' Donuts and not in your kitchen. on the other hand the kitchen's one of my favorite girl friend hang outs so....

Wed, 11/30/2011 - 07:08 | 1929125 BW
BW's picture

Cramer wants everyone to sell stocks, you know what that means.

Wed, 11/30/2011 - 01:00 | 1928730 RebelYell
RebelYell's picture

Did you know that Walmart sells single slug 12 gauge and hollow point 9mm at discount prices? i found that out tonight and topped off my basket. Thanks Sam!

Wed, 11/30/2011 - 01:29 | 1928804 Schmuck Raker
Schmuck Raker's picture

You can't eat 12g slugs. Unless you're sure...

Wed, 11/30/2011 - 01:47 | 1928853 navy62802
navy62802's picture

But you can definitely kill some big deer with those slugs. The meat from a deer, even a small one, will feed you for quite a while.

Wed, 11/30/2011 - 01:54 | 1928877 RebelYell
RebelYell's picture

Me, I'm preparing for more than deer... walkers.

Wed, 11/30/2011 - 02:05 | 1928896 navy62802
navy62802's picture

Then the perfect weapon for you, my friend, would be the AA-12 automatic shotgun loaded with 25 rounds of FRAG-12 shotgun grenades. Not much good for hunting, though ... destroys the good meat.

Wed, 11/30/2011 - 06:16 | 1929089 krispkritter
krispkritter's picture

This guy is a friggin' hoot, AA12's indeed:

http://www.youtube.com/watch?v=WOoUVeyaY_8&feature=related

Wed, 11/30/2011 - 09:27 | 1929394 bonderøven-farm ass
bonderøven-farm ass's picture

Slugs to 'kill deer'?  Hope you plan on spending A LOT of time combing through your damaged meat looking for bone frags......bad idea.

Wed, 11/30/2011 - 01:01 | 1928732 dwdollar
dwdollar's picture

Depends on what you're eating. It's hard to compete with fast food anymore. There's really no reason to make your own burger unless it's top quality beef or something exotic.

Wed, 11/30/2011 - 01:38 | 1928830 alien-IQ
alien-IQ's picture

Why would anyone pay money to eat a burger that is NOT top quality beef?

I remember a few years back I read an article about a recall of McDonalds beef. In the statement released by the company, they stated that the reason for the recall was that the beef intended for the burgers contained "an UNACCEPTABLE amount of Animal Feces". The one glaring conclusion I was left with was that they had an "acceptable" amount of animal feces in the burgers they sell.

I have never eaten at a McD's or BK or any such thing again. True story.

Wed, 11/30/2011 - 09:16 | 1929345 tarsubil
tarsubil's picture

Just buy one and look at it. Is it even real beef? Someone set a burger out for like 6 months and it didn't even rot. The stuff isn't even good enough for poop eating bacteria or molds yet Joe Fatso loves it.

Wed, 11/30/2011 - 02:14 | 1928911 Yamaha
Yamaha's picture

Have you looked at the reduced size of food prepared when eating out? Much less food and increasingly poor quality. Tonight I bought 9 large pork chops 2" thick for $18.00. One at a good steak house will cost that much and is 1" thick.

Over the past 5 year my shopping choices have increased 10X and food bills are up over the last 2 years, but not like eating out. This is simple math.

Wed, 11/30/2011 - 05:09 | 1929072 Dasa Slooofoot
Dasa Slooofoot's picture

A Big Mac meal around me is 7$.  That plus fries and a cook are a lot more expensive than buying your own 

hamburger, fries and coke.   I can get a pound of hamburger for 6$.   No meal worms and newspaper clippings involved. :)

Wed, 11/30/2011 - 01:04 | 1928737 Peterpaul
Peterpaul's picture

I don't know what the hell they are pricing. As nasty as foodstuffs have gotten in the last five years, I can still feed my family of 4 a whole chicken, rice (or muffins), and a couple of vegetables for about $8.00 and still have plenty of left overs. In what restaurant can I do that?

If anything, the rise in the spending at restaurants is more fools running in to the dollar menus for lunch...of which it is still cheaper to eat leftovers from home if you know how to plan. I can eat a sandwhich and a couple of pieces of fruit for under $2.00.

Wed, 11/30/2011 - 01:22 | 1928786 Schmuck Raker
Schmuck Raker's picture

Agreed. Someone let Tyler's intern loose again.

Chart 1 doesn't show prices, only changes in pricing.

Wed, 11/30/2011 - 01:43 | 1928843 LowProfile
LowProfile's picture

Cost per calorie breakdown would be more useful (but likely not for the writer's conclusion).

Wed, 11/30/2011 - 01:54 | 1928883 Yamaha
Yamaha's picture

Not true - fat = many calories. Fast (cheap) food wins every time!

Wed, 11/30/2011 - 01:05 | 1928742 ucsbcanuck
ucsbcanuck's picture

Define 'restaurant'. Is McDs a restaurant? 

When I cook at home I can control many things that I can't control at a restaurant. So yeah, it may be cheaper today to eat at a restaurant, but when I add up my healthcare costs in the future, lost time due to illness etc, it may be better in the long run to eat at home.

Wed, 11/30/2011 - 01:05 | 1928743 Mike in GA
Mike in GA's picture

Hmmm...At a Waffle house recently, I ordered 2 eggs, 3 slices bacon and one waffle - water to drink - and the bill came to $8.72.  With tip $10.00.

For the $10.00, I can buy 1 doz eggs, 1 loaf of bread and a pound of bacon - breakfast for a week. 

I must therefore respectfully disagree with the above article's conclusion.  Nice charts though.

 

Wed, 11/30/2011 - 01:18 | 1928777 navy62802
navy62802's picture

Beefy 5-Layer Burrito (550 calories) = $0.89

Wed, 11/30/2011 - 01:48 | 1928859 T1000
Wed, 11/30/2011 - 02:02 | 1928868 navy62802
navy62802's picture

It's calories. Cost per calorie is what I'm comparing here, certainly not health benefits or taste. Go look up how much 550 calories of soup or celery or rice or broccoli costs at the grocery store. It's ALOT more than $0.89. 550 calories of pretty much anything at the grocery store is many multiples of $0.89.

I have to say, though, I don't even look at price anymore. I just get what I need and don't worry about it, so that I don't go eat the crap they serve at the drive through. I alot $100/week on groceries for myself and usually beat that budget (usually spend about $60 - $65), even though I'm buying for nutrition and not even looking at the price.

Wed, 11/30/2011 - 02:11 | 1928899 T1000
T1000's picture

That's entirely the problem, isn't it. We equate calories with food, but that shit in McDonalds has only the appearance of food. All of a sudden, the corporations start to switch inputs to find cheaper and cheaper substitutes, but as long as we maintain calories, whats the bfd. Soon we'll be adding plastic like the Chinese to our food supply to lower costs. 

I get your point if you're comparing calories to calories, but then we've lost sight of what food is at all. Watch super size me and see what that food will do. Here's a hint to anyone that hasn't seen it: the food will kill you. Real, organic food is health, it is medicine, it is from the creator. This man made shit is poison. 

Then they place you in the medical institutions and siphon of whatever energy and money you have to fix the problem that started with the .89 cent "burrito"

 

Wed, 11/30/2011 - 02:10 | 1928906 Schmuck Raker
Schmuck Raker's picture

Well, if all you're worried about is getting as many calories as possible, at any price, here's the strategy for you:

http://forum.bodybuilding.com/showthread.php?t=936383&page=1

Let me know if I can contribute in any way.

Wed, 11/30/2011 - 02:17 | 1928917 boattrash
boattrash's picture

Yummie! Could you please bring me anonther slice of Soilant Green with that?

Wed, 11/30/2011 - 01:32 | 1928814 Zgangsta
Zgangsta's picture

Are you also pricing in your labor costs to transport, prepare, serve, and clean up after your meals?

Wed, 11/30/2011 - 01:56 | 1928885 Mike in GA
Mike in GA's picture

Labor cost doesn't matter if I or my wife is cooking. 

Transport to restaurant vs to grocery store the same.  But I go to the grocery store once per every 5-10 meals.  Time to prepare, serve and clean?  By the time you get there, park, get seated, get waited on, get your drink and salad, I'm halfway through preparing say - a meatloaf, fresh-out-of-the-garden turnip greens and salad and will have leftovers for two more meals.  I clean while I cook so when the food is done, the kitchen's clean.  No extra time necessary to allocate for cleaning or serving.  Just 2 of us. 

By the time you leave the restaurant the meat loaf is cooked and tomorrow is just a reheat.

Wed, 11/30/2011 - 06:57 | 1929117 s2man
s2man's picture

"fresh-out-of-the-garden turnip greens and salad"?

Do you mean you grow your own food? But, but, that is interfering with interstate commerce. Better watch out.

That reminds me, time to breed the rabbits again...

Wed, 11/30/2011 - 01:41 | 1928836 navy62802
navy62802's picture

Wendy's Double Stack (470 calories) = $0.99

McDouble (390 calories) = $1.00

Wed, 11/30/2011 - 01:24 | 1928789 Janice
Janice's picture

McRib is $1.99

Wed, 11/30/2011 - 01:45 | 1928848 akak
akak's picture

CHAWMP!!

Wed, 11/30/2011 - 02:45 | 1928954 Lord Koos
Lord Koos's picture

Before anyone gets too excited about the McRib meal, better take a look at this: http://www.deathandtaxesmag.com/156534/the-mcrib-contains-an-ingredient-most-commonly-found-in-yoga-mats/

Wed, 11/30/2011 - 01:25 | 1928793 fuu
fuu's picture

Charts from Bureau of Economic Analysis, BofA Merrill Lynch Global Research. Are we sure these folks can even spell food?

Wed, 11/30/2011 - 01:30 | 1928810 Schmuck Raker
Schmuck Raker's picture

Fuud?

Wed, 11/30/2011 - 01:30 | 1928808 alien-IQ
alien-IQ's picture

Sorry but these assumptions that it is cheaper to eat out then to shop and cook is, in a word, bullshit.

Perhaps it may be true that it's cheaper to go to McDonalds and eat there than it is to buy a steak and make it at home...but that's not the same food is it?

I cook. Everyday. By choice because I enjoy doing it and eating it and I'm good at it. But I also eat out on occasion. Not at fast food joints or chain restaurants...I prefer to eat at decent places if I'm going to eat out. No fuckin way in hell is the price even remotely compatible for the same meal cooked at home vs. at a restaurant.

I'm calling bullshit on these "statistics".

Wed, 11/30/2011 - 01:51 | 1928870 akak
akak's picture

I think the point of the article was not that it has become cheaper in an absolute sense to eat out vs. prepare meals at home, but that the price difference between the options is narrowing.  It will ALWAYS be cheaper to eat at home vs. eating the same or equivalent meal in a restaurant.

But personally, I deplore the current trend toward eating out (particularly in bland, homogenized national chain restaurants) vs. cooking at home.  I myself only eat out rarely, NEVER eat any sort of so-called fast food (last time in a Wendy's was in 1987, in a McDonalds was in 1984), and prepare as many of my meals as possible from scratch.  Nobody taught me to do so, either --- if you can drive a car or operate a computer, you can certainly learn how to cook to a sufficient degree to free yourself from the expense and negative health ramifications of eating the poisonous swill that passes for "fast food" in the USA today.

Wed, 11/30/2011 - 03:00 | 1928975 smiler03
smiler03's picture

"Bank of America's Economics team have found some extremely timely'inflation' signs in the food industry, where it is becoming, somewhat incredibly in this age of supposed frugality and deleveraging, cheaper to eat-out than to cook-at-home."

Wed, 11/30/2011 - 01:54 | 1928879 l-O-l
l-O-l's picture

I junked you because you need to learn to read.  NOBODY is suggesting it's cheaper to eat out.  It's not.

What's happening is that restaurants are better able to absorb food inflation costs than the grocery stores who didn't have very large margins to begin with.

Thus, it's cheaper ON A RELATIVE BASIS to go out than it is to eat at home.  Whereas $X may have bought 10 meals home for every meal out, it now only buys 8.  It is therefore rational that the percentage of meals eaten out increases.

Put another way, the restaurant premium -- labor and overhead as a % of food cost -- has dropped significantly because restaurant meals are more elastic than groceries.

Wed, 11/30/2011 - 01:58 | 1928891 Yamaha
Yamaha's picture

Elastic = able to fuck the help with low pay and no benefits because they are desperate.

Wed, 11/30/2011 - 02:26 | 1928931 Cugel
Cugel's picture

Yeah, they'd be better off if the joint went out of business.

Wed, 11/30/2011 - 07:40 | 1929145 chistletoe
chistletoe's picture

restaurants which are paid in cash,
can hire help and pay them in cash ...

this cuts out sales taxes, restaurant taxes, payroll taxes,
health insurance, unemployment insurance, and a host of other expenses ...

grocery stores have tighter inventory and accounting controls ... harder to do this ....

Wed, 11/30/2011 - 08:40 | 1929250 Implicit simplicit
Implicit simplicit's picture

True that. Great point!

Wed, 11/30/2011 - 03:04 | 1928980 smiler03
smiler03's picture

l 0 l  Funny that because I junked you for not being able to read.

Directly cut and pasted from above...

"Bank of America's Economics team have found some extremely timely'inflation' signs in the food industry, where it is becoming, somewhat incredibly in this age of supposed frugality and deleveraging, cheaper to eat-out than to cook-at-home."

Wed, 11/30/2011 - 03:22 | 1929006 alien-IQ
alien-IQ's picture

thank you for saving me the trouble of pointing out that section of the article that he must have, in his haste to ridicule others for "not knowing how to read", innocently "overlooked".

Wed, 11/30/2011 - 03:23 | 1929009 alien-IQ
alien-IQ's picture

my only regret is that I can junk you only once.

Wed, 11/30/2011 - 08:37 | 1929241 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

"Put another way, the restaurant premium -- labor and overhead as a % of food cost -- has dropped significantly because restaurant meals are more elastic than groceries."

Thats because the quality of most restaurant food is next to animal feed.

Wed, 11/30/2011 - 01:31 | 1928813 non_anon
non_anon's picture

It's a McD Recovery

Wed, 11/30/2011 - 01:37 | 1928828 lilmac929
lilmac929's picture

Funny / Tragic story...

Like everyone else here, I've tried to awaken friends and family to the inevitable scenario coming our way.  And like everyone else here, those around me who are intelligent, close family, etc. blow me off, call me crazy, or simply ignore me.  The frustration is enormous!  A few weeks ago, my boss who is an older gentleman, and one I have great respect for, came into my office and told me a story.  He had recently had dinner with his sister who has worked for a large chain grocery store for almost 30 years.  During the conversation, they began talking about the economy and what they were seeing happen out in society.  She said that over the past year she has noticed more and more people struggling to pay for their groceries.  This could be younger families to older couples on fixed incomes.  It has gotten to a point where she, on many occasions, has taken money out of her own pocket so others could eat.  She has noticed it is getting worse...and worse...and worse.  (sorry about my spelling, but I'm an engineer...we can't spell)

I have been reading ZH for a while now, but didn't join until fairly recently.  The reason I tell this story is because of what he said to me.  My boss, in closing, said, "for the past 4 years I know you have been stocking up on necessaties, especially food.  I think I'm starting to understand what I once thought was paranoia." 

My point is that people are listening to us.  Tyler should feel good about what he is doing for people, and I know all of us loyal ZH'ers appreciate his hard work and time.  Unfortunately, I don't think those we care about will move into action until it's too late if they haven't woken up already.

Regardless of what those who are still zombified may reply that troll this site, I would like to thank all that participate on this site for helping me to progess my knowledge and awareness.  I ALWAYS shy away from prediciting timing, but I feel as if our time is running short.  Not that it's the end of the world or anything like that, but instead the end of the world as we know it today.  Much love to everyone here and the best of luck in the future.

PS...Tyler, please don't lose the picture of the deer.  It never gets old!

Wed, 11/30/2011 - 01:49 | 1928846 navy62802
navy62802's picture

Learn to hunt, and you can eat that deer in Tyler's picture after you shoot it. Also get some seeds along with all the prepared food. By the time you exhaust your supply, you can have a good home-grown garden which will give you food for as long as you keep the plants healthy. Or better yet, start the garden now.

BTW - If you want to get a gun for survival, the best you can do is a shotgun. You can hunt an entire range of animals with a 12 gauge shotgun and a variety of ammo.

Wed, 11/30/2011 - 02:45 | 1928953 UnderDeGun
UnderDeGun's picture

Excellent. Cheers to you.

Wed, 11/30/2011 - 01:42 | 1928839 akak
akak's picture

With Americans giving up virtually every aspect of their individual sovereignity and independence to a rapacious, criminal, corrupt, sociopathic federal government and to an almost equally corrupt, cronyistic, quasi-fascist financial and corporate business world, why should we be surprised when they are also willing to give up control of their diet to national chain restaurants and purveyors of GMO-, salt-, sugar-, pesticide-, herbicide-, antibiotic- and hormone-laden foods? 

The self-inflicted subjugation of the American sheeple marches on!

Wed, 11/30/2011 - 01:57 | 1928888 Caviar Emptor
Caviar Emptor's picture

They already have given up independance. They buy in to the BS with eyes wide shut. THey know they are going to become obese to the point of being disabled. They relinquish thinking for themselves. They hope that by following the rules they'll get off easy

Wed, 11/30/2011 - 02:25 | 1928841 AssFire
AssFire's picture

You know at some point it will be cheaper to take a dump and have your ass wiped rather than do it yourself at home too. I am as disgusted by this as Pedophile State and the Running of the Apes last Friday. I think there are enough signs that say nothing adds up right now.. this is absurd.

The only way this could happen is if a fascist government granted heath care waivers to fast food employers while individually mandated citizens were forced by penalty of prison to pay for their own health care (plus also those who don't have the skills or desire to work) in order to make sandwiches for themselves... huh? WTF??

 

Nope, even with the government picking the "winners" it will still be cheaper and more rewarding to make your own sandwiches...well at least until the gov. inspectors on the sandwich safety council start imposing fines based upon their needs for cash. Even at that point I'll do it at a loss just for my dignity.

 

Wed, 11/30/2011 - 01:50 | 1928867 hmmmstrange
hmmmstrange's picture

Long beans and rice

Wed, 11/30/2011 - 02:47 | 1928958 UnderDeGun
UnderDeGun's picture

Long PM (which includes Lead)

Wed, 11/30/2011 - 01:53 | 1928876 Caviar Emptor
Caviar Emptor's picture

Agree that the report is misleading. But not total crap. 

Prices for groceries, even the most basic, are on the rise. We've discussed the shrinking package/rising unit cost trick that big box stores are using. But even small grocer prices have been rising all year. 

It used to be a no brainer: cooking at home was way cheaper. Not anymore. You have to work to make it cheaper especially when preparing for 4 people or less

Wed, 11/30/2011 - 01:58 | 1928890 Zgangsta
Zgangsta's picture

I ain't got nothing to eat in my home except gold.  It's a hell of a lot cheaper to eat out than stay at home eating my life savings.

Wed, 11/30/2011 - 02:03 | 1928895 Pete15
Pete15's picture

I can go to Culvers n get two chesse burgars for 4 bucks not too bad at all

Wed, 11/30/2011 - 02:05 | 1928897 spekulatn
spekulatn's picture

This piece and the one below on black friday both read like Marla wrote them. If so, welcome back. If not, never mind and good show.

 

Wed, 11/30/2011 - 02:22 | 1928926 AssFire
AssFire's picture

Hey, whats going on here?

This is where multi million dollar Michael Moore grew up. Michael Moore is a member of the 1% how come he did not come through and use some of his money to help out Flint?

I think someone needs to contact the OWS and get to the bottom of this...or at least a community organizer can establish a blue ribbon panel.

Wed, 11/30/2011 - 03:14 | 1928995 Caviar Emptor
Caviar Emptor's picture

Dominos my friend...Harrisburg, Jefferson County, Vallejo CA...More to come

Wed, 11/30/2011 - 04:14 | 1929043 indio007
indio007's picture

Flint new Emergency Manager says to union workers.

"Fuck you very much for your contribution"

 

I don't know how the STATE of MICHIGAN can make breaking a contract legal.

Wed, 11/30/2011 - 02:20 | 1928924 nah
nah's picture

I drink beer does that count

Wed, 11/30/2011 - 02:21 | 1928925 Joy on Maui
Joy on Maui's picture

I am reminded of a sign that hung in the lobby of my favorite, now ex grocery store, the Gentle Strength Food Co-Op of Tempe, Arizona, done in by Whole Foods coming to town years ago:

"There is nothing more expensive than unhealthy food."

 I do know that "eating out" can be cheaper than cooking at home - if you are willing to eat what is rubbish,  nutritionally speaking, and you can be confident that someone will pay for your doctor and his symptom-supressing prescription drugs you'll be on before long.   Big Oil, Big Pharma, and Big Ag will all have their way with you if you let them.....until our untimely death.

Wed, 11/30/2011 - 02:27 | 1928934 gbresnahan
gbresnahan's picture

I think this article is misleading because restaurants can adjust portion size or change the quality of their ingredients.  I recently went to a fairly popular family restaurant and for $12 I'm fairly confident I was served a frozen hamburger one could assemble for about $2-$3 at Sam's Club.

In general I've noticed the quality at restaurants taking a nosedive.  Along with that I've noticed piles of sides and bread but a scant amount of meat.

Wed, 11/30/2011 - 03:15 | 1928997 T1000
T1000's picture

I think you're right. A couple of weeks ago I had dinner at a restaurant I used to frequent years ago. I ordered the same meal I always did, and I was pleased to find the price the exact same as in years past. 

The waiter brought my order out; the meal was half the size it used to be.

Wed, 11/30/2011 - 03:12 | 1928992 SunBlaster
SunBlaster's picture

Spend more on Ipad and less on food! That is if price of glass comes down!

Wed, 11/30/2011 - 03:15 | 1929000 Caviar Emptor
Caviar Emptor's picture

In a biflationary world we expect food prices to rise as incomes fall

Wed, 11/30/2011 - 03:42 | 1929020 The Monkey
The Monkey's picture

The dillema of the central banks: after a while, no one cares.

Deflation lurks.

Wed, 11/30/2011 - 04:39 | 1929056 HungrySeagull
HungrySeagull's picture

BULLSHIT.

 

IT is cheaper to eat at home than to eat out.

 

Are you kidding me? We keep a freezer and 5 months food on hand of all kinds. In hard times we just dont eat out period.

 

The closest we get to eating out is perhaps a Subway or a bit of coffee at the VA.

Wed, 11/30/2011 - 07:22 | 1929136 AUD
AUD's picture

What is this bullshit?

Wed, 11/30/2011 - 07:37 | 1929141 slaughterer
slaughterer's picture

SPY broke 50DMA on overnight turbo gap thanks to PBOC.  Rip-your-face-off short squeeze part 2 to start in 3 hours.  

Wed, 11/30/2011 - 08:07 | 1929187 jcaz
jcaz's picture

LOL-  oooh yeah, just a face-ripper.....

Is that what the longs are down to- battling imaginary shorts in hope of any move up?

Talk about pathetic...............

Wed, 11/30/2011 - 08:03 | 1929185 Freewheelin Franklin
Freewheelin Franklin's picture

No shit. I just paid $6 for a fucking Entenmann's cake.

Wed, 11/30/2011 - 09:14 | 1929338 Archduke
Archduke's picture

anybody familiar with booming asian tiger economies like Singapore and HongKong can attest to this.

for the same quality, it costs a heck of a lot more to cook at home.  it's an excellent indicator.

Wed, 11/30/2011 - 09:45 | 1929501 Beau Tox
Beau Tox's picture

I cooked this week.  A big turkey gumbo; 18 servings worth with 14 servings put into freezer came to about $1 per bowl, must add in cost of rice and a veggie afterwards.  Made another 10 serving vegetable beef soup (full meal) came to around $1 per meal, will freeze 6 servings for later.  Get russet potatoes now 10lbs. $2.99, put 8lbs. in root cellar.  Planted more garlic, cabbage, greens. Chicken layer food is getting expensive.  How to keep up with these critters with more table scraps?

I NEVER spend more than $1 - $2 per serving of dinner for my family and we eat better and more nutritiously than ANY restaurant can afford to provide.  The restaurant fast-food paradigm is collapsing, and when it is done in by the final monetary paroxysm, all these that have been funding their stomachs' pseudosatiation at restaurants will find themselves both permanently hungry AND unable to enjoy real food.

Wed, 11/30/2011 - 10:33 | 1929811 Beau Tox
Beau Tox's picture

After first comment, went back into kitchen and prepped bunches of mustard and collard greens; will begin working on infamous Gumbo'aux Herbes from the German Coast Creole heritage of Louisiana's Mississippi River farm families.  These kinds of culinary agenda are seasonal-driven (re: turkey gumbo of previous post) and more in line with true microeconomics (used to be called 'home' economics), which field is becoming more relevant (as opposed to the macroeconomics that we might study at ZeroHedge) as time progresses.  Micro-economics is related to relocalization, frugality, resource flexibility, and fuel mizerism that my forebears taught me from Depression-era experience. All adults should be able to produce and preserve foodstuffs, in their estimation.

One day soon, the very macroeconomics-level effects that we see today, including the sudden lowering of dollar swap rates, which is strengthening commodities, will be really felt at the microeconomics level, as Big Macs begin to cost more than $5 apiece.  Restaurants are beginning already to slim down staffs and adjust their stock sourcing (lower quality), pricing in the lean times to come. 

Wed, 11/30/2011 - 11:19 | 1930080 Beau Tox
Beau Tox's picture

Case in Point: HorseMeat will soon be on the menu!  I will make my famous 'Equus Meuniere' (includes Reduction of Shoe Leather sauce) with sides of Poke Salade Fiorentine and Asparagus Botulini.

http://sg.news.yahoo.com/horses-could-soon-slaughtered-meat-us-080907323...

Wed, 11/30/2011 - 11:19 | 1930075 Dantzler
Dantzler's picture

I join in calling bullshit!

Granted if you buy preprepared food at the grocery, your costs to eat at home will be higher--perhaps even on par with eating out at a cheaper restaurant.

Our household of 2 is still deleveraging and thus directing much of our disposal income towards a mortgage. I buy the food and I have noticed significant increases in food prices at the grocery store.

Some actions I have taken:

Shop @ cash & carry for bulk items (dried beans, dijon, cleaning supplies, etc.)

Traded some FRNs for a 10 quart stand mixer, balance, pressure cooker, & commercial blender. With these I can now make awesome bread, cook soaked, dried beans in 10-15 minutes, and make large batches of soups, sauces, smoothies, etc.

We recently went a month without buying bread (we typically eat "artisan" bread @ $5/loaf.) Tonight's dinner is veggie burritos that will be very reasonable in cost and delicious. Last Monday I made a 5L of Vichyssouise and put 4  1L aliquots in the freezer for leftovers.

So it can be done, but it does take effort and some cooking skills. I admit that the return on my capital (through savings) will take a while at current food price levels. Last week a buddy of mine split the tasks of braising 5 lb of pork & making 16 fresh potatoe buns to bring pork sliders into work. We took in $65 in "donations" from coworkers on ~$25 in ingredient costs so I'm working on it...

I further admit that my wife & I are both foodies and that we still go out to eat somewhat regularly. However as prices continue to rise, we can hunker down more, buy a sack of flour and be able to bake bread for much less than I can buy it for. Dried beans and rice are also great food stores and the pressure cooker takes away much of the hassle of cooking them. Cooking, baking, & eating are fun and a great sourse of pleasure in an otherwise miserable world.

Wed, 11/30/2011 - 13:23 | 1931023 Totentänzerlied
Totentänzerlied's picture

Around here, for good-quality ingredients not purchased in bulk, it is more expensive to eat at home and has been for years. For acceptable-quality, it's ever-so-slightly cheaper if one factors in driving costs, tax, tip, energy (gas/electric oven, etc.), and water usage.

Accounting for nutritional content, it's still, in the medium-to-long term, cheaper to eat at home and always will be, but the up-front cost premium is exploding and I sadly must doubt that most diners are even considering such "distant" consequences of their dietary choices, economic or health-related, when the fast food joints and restaurants have such high volume.

Luckily for America, most Americans neither cook, nor can, nor want to.

 

Wed, 11/30/2011 - 16:18 | 1932015 TheJokingJollyRoger
TheJokingJollyRoger's picture

We gonna control what you eat bitchez!

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