| Why are food prices still skyrocketing, while the price of fuel has decreased?

Why are food prices still skyrocketing, while the price of fuel has decreased?

Triscuit asked:


The main reason for food prices skyrocketing was the high price of fuel used for transportation, operating farm equipment, etc. Now that those prices have fallen significantly, why are food prices still climbing??

Related posts:

  1. Need some prices to sell alot of old stuff any sites? just a mom asked: I need some help had a...
  2. Do vegans understand that bambi’s die because of their diet? strunbike asked: Farmers who grow crops (grains, leaves, roots, fruits,...
  3. My husband and I are interested in starting a mushroom farm in Hawaii? Anybody have any info pertaining to it? Jellyfish asked: We are looking at the big island or...
  4. What are the 5 largest expense categories, when running a small family farm? Deep in Thought asked: here are some choices: fuel, electricity,...
  5. How can we get food to the cities and grow our crops when the computers are destroyed by a large solar storm? Gary R asked: Solar storms have caused blackouts on large...

Filed Under 111 |

Tagged With ,

Comments

2 Responses to “Why are food prices still skyrocketing, while the price of fuel has decreased?”

  1. Lily S on April 28th, 2009 8:46 pm

    well, if you look at oil, its an inelastic good and thus nomatter what price is people will still demand oil. and so is food (inelastic) but at this point, we looka at how the financial market collaped, and yes, this caused the price of oil to decrease, but since food is a basic need, necessity, nomatter what people will still demand it at the only explanation may be companies and people trying to still get profit! (very mean of them)

  2. BoshTalk on April 30th, 2009 12:16 pm

    Most petrol is purchased from foreign sources and the financial crises has strengthened the dollar (all oil transactions must be done in US dollars). So we can buy a lot more foreign oil with much less US dollars. However, most of our food is produced domestically. Even with lower fuel and petro-chemical costs, domestic food producers are still dealing with a volatile and unsure future for the US economy. Though competition should drive prices down to equal or just above their marginal costs, the large agro firms may not be in any hurry to risk heavy competition in an unsure economy and are acting more like oligopolies who use “game theory” to avoid forcing each other’s prices down.