Author Topic: Price of flour going up by 90% in Canada !  (Read 6786 times)

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Offline canadianbacon

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Price of flour going up by 90% in Canada !
« on: February 29, 2008, 08:47:13 AM »
While watching the CTV news last night, they reported that the price of flour is going up by 90% in the coming week !
I only caught the last bit of the segment, but they blamed it on the price of oil. ( eh say what ? )

Anyway, pretty sad stuff.  ;)

They also showed a segment on our evening news last night, about a guy who just opened up a bagel shop, and early
this week, the price of flour had already gone up, - the same week he opened !, which saddened him, as he had to increase
his price of bagels by 8%.  He also said that the little sesame seeds they put on the bagels are now almost as precious as gold !,
they didn't go into how much these have gone up, but said they are very expensive now ( and again, this blamed on the price of oil )

The last time I bought flour at Costco, about 3 months ago, the price of 20kg was $9.99, and about a month ago, the price was up
to just under $14.  I'm guessing now, by early next week, this same 20kg bag ( approx 44 lbs ) will be over $20.

In the end, pizza is still very inexpensive when you look at the total picture, but gee, that's a big big price hike for us Canadians.
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Online Pete-zza

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Re: Price of flour going up by 90% in Canada !
« Reply #1 on: February 29, 2008, 09:18:35 AM »
As one might imagine, the recent increase in the price of flour has been a very hot topic at the PMQ Think Tank, as discussed, for example, at http://thinktank.pmq.com/viewtopic.php?t=5222&sid=52d941b20f4af0e3d36b24a655d6de85.

Peter

Offline Trinity

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Re: Price of flour going up by 90% in Canada !
« Reply #2 on: February 29, 2008, 11:01:27 AM »
This is true! :o

 Why though?
It's an Earth food. They are called Swedish meatballs. It's a strange thing, but every sentient race has its own version of these Swedish meatballs! I suspect it's one of those great universal mysteries which will either never be explained, or which would drive you mad if you ever learned the truth.

Offline abatardi

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Re: Price of flour going up by 90% in Canada !
« Reply #3 on: February 29, 2008, 01:14:38 PM »
oil prices, global wheat shortage
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Offline canadianbacon

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Re: Price of flour going up by 90% in Canada !
« Reply #4 on: February 29, 2008, 06:50:09 PM »
Just a quick note.

I went to Costco today, and checked the flour price for fun.

Ok, I wish I had been sitting down, because I had a real SHOCK !

What was $9.99 for the longest time for a 20 kg back of flour was up to $13.xx the last time I was there,
and now.... today ?

it was........ a whopping................. $21.99 !!!

This is for a 20 kg bag ( all purpose flour )

Believe me, I was very very sad to see this.

Now, on another note, if pizza places around here start putting up the price of a pizza by $3, I know it's total price raping,
because as we know, the amount of dough needed for a pizza is 50 cents, - *if that *.

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Online Pete-zza

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Re: Price of flour going up by 90% in Canada !
« Reply #5 on: February 29, 2008, 07:01:57 PM »
Now, on another note, if pizza places around here start putting up the price of a pizza by $3, I know it's total price raping,
because as we know, the amount of dough needed for a pizza is 50 cents, - *if that *.



Mark,

As this article at http://www.msnbc.msn.com/id/23396365/ points out, it is not only the increased flour cost. It is also cheese and other ingredients. Plus, there are increased transportation costs across the board due to higher energy costs. Even Dom DeMarco of the famed DiFara's has increased his prices, as noted in the referenced article.

In case you are interested, Tom Lehmann went through an analysis of the effects of higher flour costs in a PMQ Think Tank post at http://thinktank.pmq.com/viewtopic.php?p=30792#30792.

Peter
« Last Edit: February 29, 2008, 07:04:35 PM by Pete-zza »

Offline canadianbacon

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Re: Price of flour going up by 90% in Canada !
« Reply #6 on: February 29, 2008, 07:15:43 PM »
Hi Peter,

Thanks for the heads up !

Oh gee.... I had no clue cheese was up in price also... well, then, I guess we are going to see those price increases
up here.  With cheese being a big part of a pizza, prices will go up I'm sure.   

That's pretty interesting, it's amazing how the price of oil changes so much in our world doesn't it, and all other ingredients
going up also.  Here of course, in the winter, all things you would find on a pizza are shipped in from the warm parts of the States,
like green peppers, and mushrooms, etc.  Nothing grows here in winter.  Sheez, I got up this morning and it was -28 degrees C.
We are in a cold spell right now, but we are slowly coming out of it.

Thanks for the links Peter, I'm going to go read them.
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Online Pete-zza

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Re: Price of flour going up by 90% in Canada !
« Reply #7 on: February 29, 2008, 07:39:32 PM »
Mark,

The topic has gotten a lot of ink lately, both on Wall Street and on Main Street, as noted in this financial piece at http://www.marketwatch.com/news/story/why-takes-more-bread-buy/story.aspx?guid=%7b6C684D53-66E1-4EFB-9495-3F1B3C75C53B%7d&print=true&dist=printTop, which I have copied and pasted below.

Commentary: Why it takes a lot more bread to buy dough these days

By Irwin Kellner, MarketWatch

PORT WASHNGTON, N.Y. (MarketWatch) -- This may be hard to swallow, but it's costing a lot more bread to buy dough these days, as if the Federal Reserve didn't have enough on its plate.

If you think gasoline is expensive, check out the price of a slice of pizza -- or a bagel, for that matter. Flour costs that have more than doubled in the past few weeks have caused prices for those popular items to skyrocket by as much as 25% in just a short period of time.

For that matter, food prices in general are jumping.

According to the U.S. Department of Labor, prices of food that consumers purchase for home consumption were almost 6% higher than a year ago last month, the biggest increase in 18 years. As recently as October 2005, the yearly rise in food costs was only 1.5%.

Blame it on supply and demand.

Demand is being driven by population growth around the world -- especially from emerging markets, where people are eating more meat as they become better off, thus pushing up the need for animal feed.

And while wheat is not a main source of animal feed, it can be used if such preferred sources as soy and corn are in short supply -- which, guess what, they are.

The weak dollar, is a factor, too, as it makes products that come from the U.S. cheaper to holders of strong currencies.

In addition, lots of speculative money has shifted from uncertain markets such as stocks, bonds or real estate into the commodities pits, pushing prices up even further.

On the supply side, bad weather has affected key wheat-growing areas such as Australia and South America, cutting into harvests and thus reducing inventories. Another reason for reduced wheat supplies is that many farmers have diverted their land to biofuel crops, such as corn for ethanol.

The Department of Agriculture figures that wheat stocks will fall this year to their lowest levels in 60 years and, of course, to record lows on a per-capita basis.

To add insult to injury, soaring energy prices are adding to the costs of production and distribution of just about everything. And for pizza lovers, you can add in higher prices of cheese because farmers are thinning their dairy herds.

Besides affecting consumers' budgets, soaring food prices are also making people more aware of inflation. This is because food is purchased literally every day, unlike most other items whose prices may be steady or even falling.

A return of inflation psychology is about the last thing that the Fed needs now. That is why it will soon start sending signals to the markets that the end is near.

Translation: Don't expect the central bank to cut interest rates as rapidly in the future as it has in the past. And once the economy regains its footing, do expect a return to a more normal level of interest rates fairly quickly. 

Irwin Kellner is chief economist for MarketWatch and for North Fork Bank.

Offline November

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Re: Price of flour going up by 90% in Canada !
« Reply #8 on: March 02, 2008, 10:23:28 PM »
I'm sure the region where I live will not be immune forever, but the supermarket (retail) flour prices around here haven't budged at all recently.  King Arthur Bread flour is $2.99 for 5#, and Eagle Mills All-Purpose flour is $2.19 for 5#.  I did purchase about 20# of each just in case though.

Offline qahtan

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Re: Price of flour going up by 90% in Canada !
« Reply #9 on: March 03, 2008, 11:16:21 AM »
 You are in for a shock my friend, same size flour Costco in southern Ontario had their flour up to $26.99 last week.

 Heaven knows what it will be today? q


Offline csacks

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Re: Price of flour going up by 90% in Canada !
« Reply #10 on: March 03, 2008, 11:16:50 AM »
This increase has been in the works since mid summer.  I am a hard red winter wheat farmer.  In July the price for a bushel (62 pounds) of wheat was $5.50.  As last week the price was $11.90 local.  The price of oil has nothing to do with the price of wheat.  Farmers have no way to increase the price of their grain. However the millers should be figuring fuel costs into the the cost of their flour.  Occasionally wheat is used for animal feed, however corn is almost always a cheaper and better source of nutrients.  The argument that ethanol production is decreasing the corn supply is limited.  After using corn to produce ethanol, 85% of the corns feed value is available to be fed to livestock.  Craig

Offline canadianbacon

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Re: Price of flour going up by 90% in Canada !
« Reply #11 on: March 03, 2008, 12:40:09 PM »
That is indeed a shock.  I didn't pick any more up, figuring perhaps the price could drop in the next few months,
but now that I know this, I may just pick some up this week.  I thought Costco prices were the same across Canada,
but apparently they are not !

Thanks for the tip qahtan


You are in for a shock my friend, same size flour Costco in southern Ontario had their flour up to $26.99 last week.

 Heaven knows what it will be today? q
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Offline qahtan

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Re: Price of flour going up by 90% in Canada !
« Reply #12 on: March 03, 2008, 07:22:48 PM »
 I think Costco must have realized they had over priced their flour last week, as my husband picked up a large bag and paid $22.99 today. That $4.00 is better off in my pocket than theirs....
    ;-) Q

Offline canadianbacon

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Re: Price of flour going up by 90% in Canada !
« Reply #13 on: March 03, 2008, 07:25:13 PM »
that almost pays for another 500 grams of yeast !  ;D


I think Costco must have realized they had over priced their flour last week, as my husband picked up a large bag and paid $22.99 today. That $4.00 is better off in my pocket than theirs....
    ;-) Q
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Offline abatardi

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Re: Price of flour going up by 90% in Canada !
« Reply #14 on: March 04, 2008, 12:03:32 PM »
The price of oil has to do with the price of just about everything you buy, including wheat.

- aba
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Offline MWTC

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Re: Price of flour going up by 90% in Canada !
« Reply #15 on: March 04, 2008, 04:38:43 PM »
I just got another 50lb bag of All-Trumps High Gluten Flour. It went from $14.00 a bag to $24.00 a bag, and the lady said she expects the next price to be higher.  :(
This is in the USA not Canada.

MWTC  :chef:

Offline csacks

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Re: Price of flour going up by 90% in Canada !
« Reply #16 on: March 05, 2008, 08:47:31 AM »
Aba you lack understanding of how the pricing system in the US is run.  The farmer is a price taker.  He has no way to raise his price if the cost of oil-fuel increases.  He doesn't go to the elevator and say I need X amount to pay for my fuel.  He says how much will you give me for my wheat.  The offer of a price is solely based on supply and demand.  I stand by my statement that the price of wheat has nothing to do with the price of oil.  If you know other wise, I would love to hear it. Craig

Offline November

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Re: Price of flour going up by 90% in Canada !
« Reply #17 on: March 05, 2008, 10:02:41 AM »
Craig,

You don't think the price offered to the farmers reflects current market conditions?  Current market conditions are always influenced by the price of fuel.  Can you provide an example of when a product (as opposed to a service) is priced independent of transportation costs?

Offline Jackitup

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Re: Price of flour going up by 90% in Canada !
« Reply #18 on: March 05, 2008, 10:09:30 AM »
Everyone wants to grow corn for this goofball ethanol scam and no one is growing the other grains, thus the price goes up. Here's a good article on how the grain shortage is affecting the pizza industry.

http://www.twincities.com/ci_8431768

          Slicing into pizza profits

The $30 billion industry has been hit with a double-whammy of soaring wheat and cheese costs.
By Jeff Karoub
Associated Press
Article Last Updated: 03/02/2008 10:12:18 PM CST


First, it was cheese. And many pizza makers across the country absorbed sharply rising prices of the staple ingredient as long as they could before passing along some of the expense.

Now, they're dealing with the surging price of wheat used to make pizza crust.

Players big, small and in between in the $30 billion-plus industry are feeling the heat as they figure out how to deal with the double-barrel price spikes of the gooey and grainy commodities without sacrificing their quality, competitive edge or customer loyalty.

"Our commodity costs have probably tripled since last year on the flour," said Wes Pikula, vice president of operations for Buddy's Pizza, a 63-year-old Detroit-area chain of nine restaurants. "We're stuck with an uncertain future as well as price increases ... that are unprecedented."

The price of wheat has surged in the past month because of constraints to global supply and swelling demand from places such as China. But its volatility is as much of a concern as its price.

Spring wheat for March delivery closed at $18.25 a bushel last week on the Minneapolis Grain Exchange. Wheat historically trades at $3 to $7 a bushel.

Likewise, the price of cheese has been rising during the past year in part because of lower-than-normal cheese production and higher demand. According to the U.S. Department of Agriculture, a 40-pound block of cheddar cheese cost $70.40, or $1.76 per pound, on Feb. 16, compared with $52, or $1.30 per pound, a year ago.
For Buddy's Pizza, raising prices is the last option and one it's evaluating. One effort has been to offer more salads, sandwiches and appetizers.

"You have to drive your business with a different menu variety that doesn't rely so heavily on a single product," Pikula said.

He said his company also is exploring other types of pizza "that aren't so flour and cheese dependent," such as thinner crusts that might cut the use of each in half.

He said the experimentation is not merely because of rising prices. "People are eating different styles of pizza. It has sort of a double benefit."

Some big pizza chains, such as Pizza Hut and Papa John's, last year raised the price of their cheese-only pizzas to the same amount as one-topping pizzas at company-owned stores.

Chris Sternberg, spokesman for Louisville, Ky.-based Papa John's, said in an e-mail that the chain last fall locked in the purchase of part of the wheat supply needed for 2008. "Through this strategy, which we have continued in 2008, our restaurants are somewhat insulated from the recent run-up in the cost of wheat during the first half of the year."

He said the company is controlling inventory and working with suppliers to control costs.

Messages were left seeking comment from Domino's Pizza Inc. officials. The company in October estimated it paid 64 percent more, on average, for cheese during the third quarter of 2007. Chief Executive David Brandon said at the time that he had tried to raise prices to offset the higher cheese costs, but found it difficult with consumers strapped for cash because of soaring gas prices and the weak housing market.

Domenico DeMarco, owner of Di Fara Pizza in Brooklyn, N.Y., recently increased the price of one of his savory slices from $3 to $4, causing a stir on food blogs and tabloids. The pizza is considered among the best in the city.

DeMarco, 71, said the cost of using fresh ingredients, including flour, tomatoes and cheese from Italy, had forced the spike. DeMarco, who makes about 150 pizzas by hand a day, was unapologetic. Economics had forced his hand.

"A lot of people say I should sell it for $5," the famed pizza maker said with a slight smile as he worked the dough for a $20 pie that was $1 when he opened in 1964. A slice then was 20 cents, he said.

Jimmy Ferrell, owner of the four Fat Jimmy's pizza restaurants in Louisville, Ky., said the price of flour has gone up to about $12 for a 25-pound bag. When he got into the business eight years ago, the price was $3.99 per bag.

"You have to raise (prices) a couple times a year just to keep up," he said. "We can't jump up at the same rate that our cost is jumping up."

He said he plans to raise his prices between now and April 1. Not everything on the menu is going up, but overall it will average out to a 5 percent price increase.

He thinks the rising flour prices have hurt small operators more than national chains.

"The national chains have a lot more pull and they can negotiate prices. I don't think we have the same buying power that a Papa John's or a Domino's obviously has."

Bob Goldin, executive vice president of Technomic Inc., a food industry consulting firm, described the cost increases as a "disaster scenario," with no real end in sight and limited ability for most to pass on the bulk of the costs to consumers.

"There are no simple solutions," he said. "The trend will be to reduce product costs, and some of that may very well affect quality.

Making matters worse, he said, is an already slowed demand for traditional pizzas.

"It's hard to imagine, but there may be pizza burnout."

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Offline csacks

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Re: Price of flour going up by 90% in Canada !
« Reply #19 on: March 05, 2008, 10:59:13 AM »
November, that's the squeeze that independent truckers and farmers are in.  If the farmer could raise his price for wheat to cover his added fuel costs he would, I would.   I just can't raise my price, there is no way to do it.  The buyers of my wheat are not going to pay me a little more to pay for my added fuel costs.  Just doesn't happen.  Craig