Thursday, October 18, 2007
So I played golf last week at Widow's Walk and got paired up with some random dude. He worked for a food company that made sundry products, primarily supermarket branded items. The guy told me that they were getting "killed" by commodity price increases.
Guy - We used to buy cheese (for frozen pizzas) at $1.10 per pound. Now it's over $2 per pound. Also, soy beans, SOY BEANS are killing us since we use tons of soy bean oil in our salad dressings. Who knows when this is going to end?....
Haha. I told him (tactfully) that in my opinion it was going to get much worse over the next five years. Luckily for his company, competing products all have the same rising input costs to contend with.
Nerd economists have always held that the demand for food is "inelastic" with respect to price.
We shall see.