Cost of Higher Commodities

We're getting awfully close to the point where commodity prices are going to be having a net positive effect on the budget of the average American in 2008.  In the chart below we calculated the '08 price change of the major food and energy commodities in the CRB index (Corn, Soy, Wheat, Cattle, Hogs, Oil and Natural Gas) and multiplied the changes by the annual per capita consumption of each item.  While this method may oversimplify the actual costs, it provides a good idea of how changes in commodity prices have impacted consumers wallets this year.

Since peaking at a cost of $4.77 per person per day ($1700 per year) on July 3rd, the average cost of higher commodity prices in 2008 has decreased to just an extra 36 cents per day per person, or just $131 per year.

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Comments

[DaveK]

Commodity prices have declined in recent weeks, however, isn't this simply a correction? Many still believe that commodities in general are in a long-term bull market.

[San Fran Sam]

This also assumes that the companies for whom commodities are a significant portion of their costs will be generous enough to pass along their cost savings along to the consumer.

Can you say "fat chance"? I knew you could.

[SteveW]

Wait...inflation is supposed to be represented ex- food and energy...if it doesn't count on the way up how can it count on the way down???