Problems with the food supply

Just in case you need something else to worry about, global food prices are skyrocketing (here not so much–yet), due to increased demand and shorter supplies:

Since last summer, several events — floods in Australia, blistering drought in Russia, the threat of a poor winter wheat crop in China — have compounded concerns about the food supply and pushed world prices to the highest levels measured since the U.N. Food and Agricultural Organization began calculating its index in 1990.

For decades, the world was often swimming in surplus food because farmers were so productive. But rising demand has caught up, and reserves have become so tight that global food markets are vulnerable to even minor shocks. Many analysts say that higher, more volatile prices may be here to stay.

The new dynamic reflects in part the rising demand for meat in developing countries such as China, which has almost single-handedly driven up prices for the soybeans it imports for animal meal, as well as the increasing use of corn for ethanol. Today, at least a third of the U.S. crop goes for making fuel. In addition, there is spreading concern that climate change may make weather less settled and more disruptive to growers.

“For the last 60 years, the simple story was agricultural productivity — great productivity gains, unabated,” said Joseph Glauber, chief economist at the U.S. Department of Agriculture. “But in the last five years, prices have lifted, and you see this real strong demand.”

Since last summer, the market price for corn to be delivered in May nearly doubled from $3.67 to $7.23 as of late last month, according to data compiled by Dan O’Brien, an agricultural economist at Kansas State University.

Grain reserves have dwindled. The latest USDA estimates, released Thursday, show U.S. reserves of corn and soybeans at historic lows, less than 5 percent of projected demand for the coming year. Typical reserves have been three or more times that amount, a chief reason why it does not take much to send prices skyrocketing.

via Higher food prices may be here to stay – The Washington Post.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • Lily

    It looks like a lot of the problems have been caused by interventions (eg: corn ethanol subsidies/etc.) and poor management (eg: not holding reserves) by the government (not to mention their plans to use the oil reserves to artificially drive down gas supplies).

    There is also the problem of another “man-made disaster” in farming. One in which our government is directly responsible for driving up food prices, creating high unemployment, and making us dependent upon importing food from other nations. Here are some excerpts about the problems in CA:

    Excerpt:
    “The Central Valley of California is one of the largest producers of our nation’s food supply. California produces half of the U.S.-grown fruits, nuts and vegetables on the nation’s grocery shelves and the prices you pay are directly affected by the California harvest.”

    “The deliberate decision by this administration in 2009 and 2010 to divert hundreds of billions of gallons of water away from the Central Valley destroyed a quarter million acres of the most productive farmland in America, it threw tens of thousands of families into unemployment and it affected grocery prices across the country.”

    http://mcclintock.house.gov/2011/01/water-water-everywhereexcept-for-californias-farms.shtml

    Excerpt:
    “At the time, the administration blamed a mild drought, but never explained why a drought justified their decision to pour 200 billion gallons of water (that we did have) directly into the Pacific Ocean. In a rational world a drought means that you are more careful not to waste the water that you have.”

    “The real reason for this irrational policy, of course, is that they were indulging the environmental Left’s pet cause, a three-inch minnow called the Delta Smelt. Diverting precious water to Delta Smelt habitat was considered more important than producing the food that feeds the country and preserving the jobs that produce the food.”

    “This year we have nearly twice the normal water supply at this point in the season, and yet the Department of Interior will allow only 45 percent of normal water deliveries to California Central Valley agriculture south of the Delta. The difference comes to 1.1 million acre-feet of water. 1.1 million acre feet.”

    http://www.tommcclintock.com/blog/water-water-everywhereexcept-for-californias-farms

  • Lily

    It looks like a lot of the problems have been caused by interventions (eg: corn ethanol subsidies/etc.) and poor management (eg: not holding reserves) by the government (not to mention their plans to use the oil reserves to artificially drive down gas supplies).

    There is also the problem of another “man-made disaster” in farming. One in which our government is directly responsible for driving up food prices, creating high unemployment, and making us dependent upon importing food from other nations. Here are some excerpts about the problems in CA:

    Excerpt:
    “The Central Valley of California is one of the largest producers of our nation’s food supply. California produces half of the U.S.-grown fruits, nuts and vegetables on the nation’s grocery shelves and the prices you pay are directly affected by the California harvest.”

    “The deliberate decision by this administration in 2009 and 2010 to divert hundreds of billions of gallons of water away from the Central Valley destroyed a quarter million acres of the most productive farmland in America, it threw tens of thousands of families into unemployment and it affected grocery prices across the country.”

    http://mcclintock.house.gov/2011/01/water-water-everywhereexcept-for-californias-farms.shtml

    Excerpt:
    “At the time, the administration blamed a mild drought, but never explained why a drought justified their decision to pour 200 billion gallons of water (that we did have) directly into the Pacific Ocean. In a rational world a drought means that you are more careful not to waste the water that you have.”

    “The real reason for this irrational policy, of course, is that they were indulging the environmental Left’s pet cause, a three-inch minnow called the Delta Smelt. Diverting precious water to Delta Smelt habitat was considered more important than producing the food that feeds the country and preserving the jobs that produce the food.”

    “This year we have nearly twice the normal water supply at this point in the season, and yet the Department of Interior will allow only 45 percent of normal water deliveries to California Central Valley agriculture south of the Delta. The difference comes to 1.1 million acre-feet of water. 1.1 million acre feet.”

    http://www.tommcclintock.com/blog/water-water-everywhereexcept-for-californias-farms

  • Lily

    Ooops! That should read “artificially drive down gas prices”, not “artificially drive down gas supplies” – sorry about that!

  • Lily

    Ooops! That should read “artificially drive down gas prices”, not “artificially drive down gas supplies” – sorry about that!

  • Michael Z.

    So, how long until we stop turning our food into fuel? 1/3 of the American corn crop goes to ethanol, are you kidding?

  • Michael Z.

    So, how long until we stop turning our food into fuel? 1/3 of the American corn crop goes to ethanol, are you kidding?

  • Joe

    there are international problems too. Ukraine (the breadbasket of Europe) is having a heck of a time figuring out how to let the market control its production and shipping of grain. They are still using Soviet Era quota and price fixing systems that distort reality. Last year, they let millions of bushels rot in storage even while market prices were very high because the alloted amount had already been shipped.

  • Joe

    there are international problems too. Ukraine (the breadbasket of Europe) is having a heck of a time figuring out how to let the market control its production and shipping of grain. They are still using Soviet Era quota and price fixing systems that distort reality. Last year, they let millions of bushels rot in storage even while market prices were very high because the alloted amount had already been shipped.

  • rlewer

    Farmers are finally getting prices that enable them to make a profit without government subsidy. Is this a bad thing? We have been government subsidized food food a long time. Now farmers will be encouraged to raise all that they are able too.

  • rlewer

    Farmers are finally getting prices that enable them to make a profit without government subsidy. Is this a bad thing? We have been government subsidized food food a long time. Now farmers will be encouraged to raise all that they are able too.

  • DonS

    U.S. ethanol policy is idiocy, and if we don’t stop it, the U.S. will bear some blame for hunger in third world countries. Environmental policy in the San Joaquin delta in CA is more idiocy. Economic hardship in the Central Valley and its farming communities is extreme — unemployment rates over 30% in some sectors, largely because of the latte liberals in the Bay Area and their environmental lunacy. Reversing these two governmental policies would help the situation. A lot.

  • DonS

    U.S. ethanol policy is idiocy, and if we don’t stop it, the U.S. will bear some blame for hunger in third world countries. Environmental policy in the San Joaquin delta in CA is more idiocy. Economic hardship in the Central Valley and its farming communities is extreme — unemployment rates over 30% in some sectors, largely because of the latte liberals in the Bay Area and their environmental lunacy. Reversing these two governmental policies would help the situation. A lot.

  • helen

    Michael @ 3
    So, how long until we stop turning our food into fuel? 1/3 of the American corn crop goes to ethanol, are you kidding?

    And the taxpayer subsidizes this. He also subsidizes it indirectly through additional wear and tear on his motor. Salt in the wound: this is claimed to aid the environment and it’s actually a negative.

    [If you have nothing else to worry about, take a trip out to your suburbs, where (very likely) the best farmland in your area is being converted into ticky-tacky developments to be sold at 0 down, 0 move-in, to people who will trash them and move on inside of 30 years. "No investment, no care."
    We will run out of farmland way before we run out of "developers"!]

  • helen

    Michael @ 3
    So, how long until we stop turning our food into fuel? 1/3 of the American corn crop goes to ethanol, are you kidding?

    And the taxpayer subsidizes this. He also subsidizes it indirectly through additional wear and tear on his motor. Salt in the wound: this is claimed to aid the environment and it’s actually a negative.

    [If you have nothing else to worry about, take a trip out to your suburbs, where (very likely) the best farmland in your area is being converted into ticky-tacky developments to be sold at 0 down, 0 move-in, to people who will trash them and move on inside of 30 years. "No investment, no care."
    We will run out of farmland way before we run out of "developers"!]

  • WebMonk

    rlewer 5 – not even close. Wheat will need to at least be around $11 before you could do it without serious govt support. That’s almost double the current cost (around $7.50).

    I don’t know corn’s prices and issues, but I suspect they’re at least as supported as wheat, so you’d probably need to almost double the price of corn as well before corn farmers could be completely off of government subsidies.

    Ready for 90% ground beef at $4-5 per pound? Bread starting at $5 per loaf and going up from there? Milk at nearly $7 per gallon?

    Let’s not go praising high wheat and corn prices too quickly – there are some severe results.

  • WebMonk

    rlewer 5 – not even close. Wheat will need to at least be around $11 before you could do it without serious govt support. That’s almost double the current cost (around $7.50).

    I don’t know corn’s prices and issues, but I suspect they’re at least as supported as wheat, so you’d probably need to almost double the price of corn as well before corn farmers could be completely off of government subsidies.

    Ready for 90% ground beef at $4-5 per pound? Bread starting at $5 per loaf and going up from there? Milk at nearly $7 per gallon?

    Let’s not go praising high wheat and corn prices too quickly – there are some severe results.

  • rlewer

    Only a tiny part of the cost of a loaf of bread is the p;rice of wheat paid to the farmer. The present prices are not high. They are more realistic.

  • rlewer

    Only a tiny part of the cost of a loaf of bread is the p;rice of wheat paid to the farmer. The present prices are not high. They are more realistic.

  • Random Lutheran

    Ready for $4–5 lb beef? Already there out in the East. Bread hasn’t gotten that bad for the mass-produced variety, but the “homestyle” store bakery bread is at $5 a loaf, too. And prices are only going up. If we were to replace corn with wheat in the fields, prices wouldn’t have to go through the roof, in many places we could have two crops a year, and we could substantially reduce the use of HFCS. There’s a lot of win in that.

  • Random Lutheran

    Ready for $4–5 lb beef? Already there out in the East. Bread hasn’t gotten that bad for the mass-produced variety, but the “homestyle” store bakery bread is at $5 a loaf, too. And prices are only going up. If we were to replace corn with wheat in the fields, prices wouldn’t have to go through the roof, in many places we could have two crops a year, and we could substantially reduce the use of HFCS. There’s a lot of win in that.

  • WebMonk

    LuthRand – ouch! I’m in the DC sort of area and ground beef 90% is still down around $2.90 to $3.15! Sucks to be in your area! :-) One of the things that would happen if corn production were cut is that the cost of meat would go up considerably because the cost of corn would go up considerably too (unless you meant that corn would not be used for ethanol any more, so the corn supply available for feed would vaguely stay constant)

    rlewis – yes and no. As with almost everything, it’s a complex system. Wheat prices only make up 20% of the cost of a loaf of typical bread from a supermarket. However, for lots of other things, it makes up a larger portion, such as raw flour, and for the more ‘whole grain’ breads, the wheat makes up a larger cut as well.

    For my area, bread is around $3.50 per loaf (not counting the white, Wonder Bread junk, but going with a basic wheat bread, not real whole wheat, but just generic ‘wheat bread’). That would jump the loaf up to $4.20 for that type of bread, and for a low-level whole wheat bread that runs around $4 for my area, that jumps it up to $5 per loaf, at least.

    We, here in America can afford things like that since we only spend around 10-15% of our income on food. If it jumps up by 20-30%, then we’ll spend 12-18% on food – it won’t kill us. :-)

    However, for poorer countries where people spend 50-80% of their income on food, having a jump of 20-30% can start leading to starvation.

    Having farmers get high enough prices for their crops without government subsidies is an attractive proposition, however it does have some considerable ramifications.

  • WebMonk

    LuthRand – ouch! I’m in the DC sort of area and ground beef 90% is still down around $2.90 to $3.15! Sucks to be in your area! :-) One of the things that would happen if corn production were cut is that the cost of meat would go up considerably because the cost of corn would go up considerably too (unless you meant that corn would not be used for ethanol any more, so the corn supply available for feed would vaguely stay constant)

    rlewis – yes and no. As with almost everything, it’s a complex system. Wheat prices only make up 20% of the cost of a loaf of typical bread from a supermarket. However, for lots of other things, it makes up a larger portion, such as raw flour, and for the more ‘whole grain’ breads, the wheat makes up a larger cut as well.

    For my area, bread is around $3.50 per loaf (not counting the white, Wonder Bread junk, but going with a basic wheat bread, not real whole wheat, but just generic ‘wheat bread’). That would jump the loaf up to $4.20 for that type of bread, and for a low-level whole wheat bread that runs around $4 for my area, that jumps it up to $5 per loaf, at least.

    We, here in America can afford things like that since we only spend around 10-15% of our income on food. If it jumps up by 20-30%, then we’ll spend 12-18% on food – it won’t kill us. :-)

    However, for poorer countries where people spend 50-80% of their income on food, having a jump of 20-30% can start leading to starvation.

    Having farmers get high enough prices for their crops without government subsidies is an attractive proposition, however it does have some considerable ramifications.

  • http://www.toddstadler.com/ tODD

    Might as well put in a plug for baking your own bread. It’s not hard (once you get it down, which means it’s not simple, either; but what do I know, my wife makes it). You can make bread for super-cheap. And it’s better bread than you can buy, in most cases, anyhow.

  • http://www.toddstadler.com/ tODD

    Might as well put in a plug for baking your own bread. It’s not hard (once you get it down, which means it’s not simple, either; but what do I know, my wife makes it). You can make bread for super-cheap. And it’s better bread than you can buy, in most cases, anyhow.

  • WebMonk

    tODD – “super-cheap” including the cost of her time too? Spending just two or three hours per week makes the bread pretty pricey even if your wife only rates her time at minimum wage. Two hours over the course of a week would be worth $14, and split amongst three loaves, that makes the loaves pretty dear!

    A lot of people will want a bread-maker too. Those run anywhere from $50 to $500. Tack on the cost of the occasional wasted loaf because it didn’t mix right, didn’t get the ingredients quite right, or maybe got a poor batch of yeast, and it’s not quite the money-saver it is often advertised to be.

    In the proper circumstances, it certainly can be very worthwhile, but it’s not always so, and considering the number of used bread-makers I see constantly advertised for sale, I would even go so far as to say it usually isn’t a money-saver.

  • WebMonk

    tODD – “super-cheap” including the cost of her time too? Spending just two or three hours per week makes the bread pretty pricey even if your wife only rates her time at minimum wage. Two hours over the course of a week would be worth $14, and split amongst three loaves, that makes the loaves pretty dear!

    A lot of people will want a bread-maker too. Those run anywhere from $50 to $500. Tack on the cost of the occasional wasted loaf because it didn’t mix right, didn’t get the ingredients quite right, or maybe got a poor batch of yeast, and it’s not quite the money-saver it is often advertised to be.

    In the proper circumstances, it certainly can be very worthwhile, but it’s not always so, and considering the number of used bread-makers I see constantly advertised for sale, I would even go so far as to say it usually isn’t a money-saver.

  • http://www.toddstadler.com/ tODD

    Spoken like a true economist, WebMonk (@13).

    But see, some people have these things called “hobbies”. And they enjoy doing them — in fact, they engage in them voluntarily, without economic benefit! And, for not a few Americans, spending time baking bread would be a better use of their time (billable or otherwise) than whatever else they were doing, anyhow.

    Criminy, WebMonk! When someone asks you how much your ISP costs, do you figure in the amount of time you spend surfing the Internet multiplied by some made-up hourly wage? :-P

  • http://www.toddstadler.com/ tODD

    Spoken like a true economist, WebMonk (@13).

    But see, some people have these things called “hobbies”. And they enjoy doing them — in fact, they engage in them voluntarily, without economic benefit! And, for not a few Americans, spending time baking bread would be a better use of their time (billable or otherwise) than whatever else they were doing, anyhow.

    Criminy, WebMonk! When someone asks you how much your ISP costs, do you figure in the amount of time you spend surfing the Internet multiplied by some made-up hourly wage? :-P

  • http://www.toddstadler.com/ tODD

    Seriously, your analysis only makes sense if we assume that my wife uses all of her available waking hours making money, such that time spent baking bread is lost opportunity to make money elsewhere. That is not the case. If she were not baking bread, she would not be out somewhere working a second job.

  • http://www.toddstadler.com/ tODD

    Seriously, your analysis only makes sense if we assume that my wife uses all of her available waking hours making money, such that time spent baking bread is lost opportunity to make money elsewhere. That is not the case. If she were not baking bread, she would not be out somewhere working a second job.

  • DonS

    So what you’re saying, tODD @ 15, is that if she were not baking bread that does not necessarily mean she would be out making bread. :-)

  • DonS

    So what you’re saying, tODD @ 15, is that if she were not baking bread that does not necessarily mean she would be out making bread. :-)

  • WebMonk

    :-D You’re going to laugh at me, but I do consider the cost of my time spent on the Internet when I consider the cost of my ISP. However, I also take the time savings that it affords me (compared to going to the library) into account as well. It also gets factored into my entertainment budget and a couple other things.

    Yes, I am that nerdy! :-)

    VERY slightly more seriously, a wife’s cost of time making bread isn’t exactly being compared to going out and getting a job, but to the time she could be spending on other things.

    (assuming she works full time at home) If she spends two or three hours a week on bread, that is two or three hours not doing any number of other tasks around the house, not taking walks, not taking a nap, not visiting with friends, not ….. You get the idea.

    It’s an opportunity cost – would she rather have an extra three hours each week to do something else, or would she prefer to save $6 on bread?

    A hobby does change the consideration a bit, it turns it into something more akin to entertainment, and the entertainment has the very wonderful side benefit of saving a couple dollars each week.

    The only person I know personally who actually came out on top financially with making her own bread is my mother in law. She spent a very minimal amount of time on the bread (she is VERY good and fast at making it), she didn’t use a bread making machine, and her family of five kids went through a LOT of bread each week.

    Having grown up in the homeschooling world, I’ve known dozens of families who have gone for a while making their own bread (typically for cost savings, though a couple families did it for health/nutrition reasons), and exactly zero of them said they saved money on it. Yes, I realize that is merely anecdotal “evidence”, but I suspect that a proper study would tend to generally back it up.

    I’ve encouraged people to make their own bread as a hobby, or as a nutritional improvement, but never as a real money-saving effort. For money savings, I think it is better to spend the time doing some hard-core couponing. (my wife kicks ass at couponing – $10 for two grocery carts full of stuff!)

  • WebMonk

    :-D You’re going to laugh at me, but I do consider the cost of my time spent on the Internet when I consider the cost of my ISP. However, I also take the time savings that it affords me (compared to going to the library) into account as well. It also gets factored into my entertainment budget and a couple other things.

    Yes, I am that nerdy! :-)

    VERY slightly more seriously, a wife’s cost of time making bread isn’t exactly being compared to going out and getting a job, but to the time she could be spending on other things.

    (assuming she works full time at home) If she spends two or three hours a week on bread, that is two or three hours not doing any number of other tasks around the house, not taking walks, not taking a nap, not visiting with friends, not ….. You get the idea.

    It’s an opportunity cost – would she rather have an extra three hours each week to do something else, or would she prefer to save $6 on bread?

    A hobby does change the consideration a bit, it turns it into something more akin to entertainment, and the entertainment has the very wonderful side benefit of saving a couple dollars each week.

    The only person I know personally who actually came out on top financially with making her own bread is my mother in law. She spent a very minimal amount of time on the bread (she is VERY good and fast at making it), she didn’t use a bread making machine, and her family of five kids went through a LOT of bread each week.

    Having grown up in the homeschooling world, I’ve known dozens of families who have gone for a while making their own bread (typically for cost savings, though a couple families did it for health/nutrition reasons), and exactly zero of them said they saved money on it. Yes, I realize that is merely anecdotal “evidence”, but I suspect that a proper study would tend to generally back it up.

    I’ve encouraged people to make their own bread as a hobby, or as a nutritional improvement, but never as a real money-saving effort. For money savings, I think it is better to spend the time doing some hard-core couponing. (my wife kicks ass at couponing – $10 for two grocery carts full of stuff!)

  • Louis

    Webmonk – we save money – if you compare like with like. What we eat is essentially artisan bread (wheat, water, honey, yeast, no other additives), and from heritage wheat (Red Fife), which we mill ourselves. The cost of such a loaf is much more than the average shop-bought loaf. The initial capital investment though was $4oo to buy a table top mill. And I buy my wheat directly from the farmer, which means that the cost of flour is lower than if I buy it from retail.

    Plus, as Todd says, it is a bit of a hobby. And I bake as much bread myself as my wife. By hand. Kneading is good exercise.

  • Louis

    Webmonk – we save money – if you compare like with like. What we eat is essentially artisan bread (wheat, water, honey, yeast, no other additives), and from heritage wheat (Red Fife), which we mill ourselves. The cost of such a loaf is much more than the average shop-bought loaf. The initial capital investment though was $4oo to buy a table top mill. And I buy my wheat directly from the farmer, which means that the cost of flour is lower than if I buy it from retail.

    Plus, as Todd says, it is a bit of a hobby. And I bake as much bread myself as my wife. By hand. Kneading is good exercise.

  • http://www.toddstadler.com/ tODD

    WebMonk (@17), my wife has a job, first of all. And, once again, she seems to enjoy making bread. So I really can’t see it as a lost opportunity. We don’t have a bread machine, though she does use our kitchen mixer (which she uses for other things, not just bread). The only bread-specific investment we’ve made is two sandwich-loaf pans and two plastic buckets to hold all the bulk wheat we’ve purchased.

    Still, I feel like I’m failing to understand your analysis. If I want to calculate if I’m saving money by doing X instead of Y, I don’t now, nor will I ever, consider how much of my free time gets used up in the process. I will consider solely how much money comes out of or stays in my bank account.

    And, again, I’m pretty darn certain that we will spend less on bread (and bread-making supplies) than if we were to purchase equivalent amounts of bread in the store — I think the analysis might even hold up if you don’t take into consideration the high quality of the bread my wife makes (compared to generally inferior store bread), but I’m not sure. It does help that we bought some very hefty sacks of flour with a rather hefty coupon (you have to love it when you hit the $10 maximum on a buy-one-get-one-free).

    Anyhow, this certainly doesn’t hold up for all homemade foods, true. I love to make salsa, but I cannot purchase tomatoes in enough quantity to get anywhere near the store costs. But then, my salsa is superior to any store salsa, if I may say so. Same with granola, which kind of surprised us. But we didn’t buy the oats in a particularly bulk quantity.

  • http://www.toddstadler.com/ tODD

    WebMonk (@17), my wife has a job, first of all. And, once again, she seems to enjoy making bread. So I really can’t see it as a lost opportunity. We don’t have a bread machine, though she does use our kitchen mixer (which she uses for other things, not just bread). The only bread-specific investment we’ve made is two sandwich-loaf pans and two plastic buckets to hold all the bulk wheat we’ve purchased.

    Still, I feel like I’m failing to understand your analysis. If I want to calculate if I’m saving money by doing X instead of Y, I don’t now, nor will I ever, consider how much of my free time gets used up in the process. I will consider solely how much money comes out of or stays in my bank account.

    And, again, I’m pretty darn certain that we will spend less on bread (and bread-making supplies) than if we were to purchase equivalent amounts of bread in the store — I think the analysis might even hold up if you don’t take into consideration the high quality of the bread my wife makes (compared to generally inferior store bread), but I’m not sure. It does help that we bought some very hefty sacks of flour with a rather hefty coupon (you have to love it when you hit the $10 maximum on a buy-one-get-one-free).

    Anyhow, this certainly doesn’t hold up for all homemade foods, true. I love to make salsa, but I cannot purchase tomatoes in enough quantity to get anywhere near the store costs. But then, my salsa is superior to any store salsa, if I may say so. Same with granola, which kind of surprised us. But we didn’t buy the oats in a particularly bulk quantity.

  • WebMonk

    Louis, I’m not sure if you think you’re saving money or not, you mentioned that you’re saving money, but then described the loaves you make as being much more expensive than the standard store loaves. It sounds like you’re doing a lot of it as hobby, and enjoyment, and nutrition, and to support local businesses.

    tODD,

    If I want to calculate if I’m saving money by doing X instead of Y, I don’t now, nor will I ever, consider how much of my free time gets used up in the process.

    *cough*bull*cough*shite*cough* :-)

    Would you spend 50 hours of free time to save $0.50 in the bank? Of course not! Whether you recognize it or not, you do put a price tag on your time.

    Let’s say one makes soap to save money (not for fun, health, or other reasons – just to save money). If you spend eight hours to save $1, it’s probably not worth it even though your bank account has an extra $1 – you have just considered how much of your free time gets used up to save money

    This doesn’t apply to things done as hobbies, entertainment, health, etc without a bit of tweaking. Since your wife bakes bread at least partially for enjoyment, better health, support local farmers, etc, it makes the estimation a bit more complicated.

    I suspect you and your wife would continue making the bread that way even if it didn’t save any money. In fact you would probably keep doing it even if it cost a little bit more than the equivalent loaf from the store. (as if the store could have an “equivalent loaf” with you wife’s delectable cooking! Hah!) :-)

    If that’s true, then you make your own bread for a variety of reasons, and any possible monetary savings are an added bonus.

    Just to take it a little further, what if making the bread cost a LOT more than what you could get at the store? The bread is enjoyable to make, and is much tastier and more healthy than the stuff from the store. However, it also costs (for whatever reason) $10 per loaf to make it! Would you still make it? What if it cost $20/30/40 per loaf?

    At some point you would stop making it, and that point is the value you place on the difference in fun/health/taste you get from the homemade bread over the store’s bread.

    Though we often say we don’t put a price on our health and time, in reality we do. You put a price tag on your time that is greater than 13 cents/hr (taking 8 hours to save a dollar on soap), and though it’s probably not precise, you also put a price tag on your time spent making bread to save money. If it took your wife 20 hours per week to make the bread (ignoring the fact that it probably wouldn’t be very enjoyable to do any more) she would not be spending the time to save money making homemade bread. There is a price on the time which is taken into consideration. (usually subconsciously)

    You, I and everyone does indeed consider how much free time gets used up in the process when saving money by doing X instead of Y.

  • WebMonk

    Louis, I’m not sure if you think you’re saving money or not, you mentioned that you’re saving money, but then described the loaves you make as being much more expensive than the standard store loaves. It sounds like you’re doing a lot of it as hobby, and enjoyment, and nutrition, and to support local businesses.

    tODD,

    If I want to calculate if I’m saving money by doing X instead of Y, I don’t now, nor will I ever, consider how much of my free time gets used up in the process.

    *cough*bull*cough*shite*cough* :-)

    Would you spend 50 hours of free time to save $0.50 in the bank? Of course not! Whether you recognize it or not, you do put a price tag on your time.

    Let’s say one makes soap to save money (not for fun, health, or other reasons – just to save money). If you spend eight hours to save $1, it’s probably not worth it even though your bank account has an extra $1 – you have just considered how much of your free time gets used up to save money

    This doesn’t apply to things done as hobbies, entertainment, health, etc without a bit of tweaking. Since your wife bakes bread at least partially for enjoyment, better health, support local farmers, etc, it makes the estimation a bit more complicated.

    I suspect you and your wife would continue making the bread that way even if it didn’t save any money. In fact you would probably keep doing it even if it cost a little bit more than the equivalent loaf from the store. (as if the store could have an “equivalent loaf” with you wife’s delectable cooking! Hah!) :-)

    If that’s true, then you make your own bread for a variety of reasons, and any possible monetary savings are an added bonus.

    Just to take it a little further, what if making the bread cost a LOT more than what you could get at the store? The bread is enjoyable to make, and is much tastier and more healthy than the stuff from the store. However, it also costs (for whatever reason) $10 per loaf to make it! Would you still make it? What if it cost $20/30/40 per loaf?

    At some point you would stop making it, and that point is the value you place on the difference in fun/health/taste you get from the homemade bread over the store’s bread.

    Though we often say we don’t put a price on our health and time, in reality we do. You put a price tag on your time that is greater than 13 cents/hr (taking 8 hours to save a dollar on soap), and though it’s probably not precise, you also put a price tag on your time spent making bread to save money. If it took your wife 20 hours per week to make the bread (ignoring the fact that it probably wouldn’t be very enjoyable to do any more) she would not be spending the time to save money making homemade bread. There is a price on the time which is taken into consideration. (usually subconsciously)

    You, I and everyone does indeed consider how much free time gets used up in the process when saving money by doing X instead of Y.

  • Louis

    Webmonk – yes, but we weren’t making standard loaves. It is like saying – but a Ford is cheaper! Well yes, but I’m making Rolls-equivalents, but cheaper than Rolls Royce….

    Also, the actual time spent in making bread is minimal – preparation & kneading – maybe 15 mins, and then moving the dough from proofing bowl to bread pan, into the oven, and out, maybe 3 mins. You are free to do other things while the bread rises and bakes. Thus actual time spent is not more than 20 mins, or 10mins/loaf. That is not much more than 1 hour/week, or $14.00 on minimum wage. And I don’t mind doing that, it is relaxing. I could be paying to go to a Gym and pump iron…

  • Louis

    Webmonk – yes, but we weren’t making standard loaves. It is like saying – but a Ford is cheaper! Well yes, but I’m making Rolls-equivalents, but cheaper than Rolls Royce….

    Also, the actual time spent in making bread is minimal – preparation & kneading – maybe 15 mins, and then moving the dough from proofing bowl to bread pan, into the oven, and out, maybe 3 mins. You are free to do other things while the bread rises and bakes. Thus actual time spent is not more than 20 mins, or 10mins/loaf. That is not much more than 1 hour/week, or $14.00 on minimum wage. And I don’t mind doing that, it is relaxing. I could be paying to go to a Gym and pump iron…

  • http://www.toddstadler.com/ tODD

    WebMonk, what I said (@19):

    If I want to calculate if I’m saving money by doing X instead of Y, I don’t now, nor will I ever, consider how much of my free time gets used up in the process.

    What I did not say:

    If I want to calculate if it’s worth it to do X instead of Y, I don’t now, nor will I ever, consider how much of my free time gets used up in the process.

    You will note that you spent a lot of time (@20) responding as if I had written the second statement. Again, I did not.

    Yes, I put a value on my time — though that value is ill-defined and highly variable.

    But — please note what I am saying here — if I, according to your hypothetical situation, “spent 50 hours of free time to save $0.50 in the bank”, I would still consider myself to have “saved money”. I would also very likely believe that I had wasted my time.

    Again, I say all this in response to your claims of lack of money savings (@17) — “The only person I know personally who actually came out on top financially with making her own bread”, “exactly zero of them said they saved money on it”, and so on.

  • http://www.toddstadler.com/ tODD

    WebMonk, what I said (@19):

    If I want to calculate if I’m saving money by doing X instead of Y, I don’t now, nor will I ever, consider how much of my free time gets used up in the process.

    What I did not say:

    If I want to calculate if it’s worth it to do X instead of Y, I don’t now, nor will I ever, consider how much of my free time gets used up in the process.

    You will note that you spent a lot of time (@20) responding as if I had written the second statement. Again, I did not.

    Yes, I put a value on my time — though that value is ill-defined and highly variable.

    But — please note what I am saying here — if I, according to your hypothetical situation, “spent 50 hours of free time to save $0.50 in the bank”, I would still consider myself to have “saved money”. I would also very likely believe that I had wasted my time.

    Again, I say all this in response to your claims of lack of money savings (@17) — “The only person I know personally who actually came out on top financially with making her own bread”, “exactly zero of them said they saved money on it”, and so on.

  • WebMonk

    Ah, I am shown the conflation of my ways! You’re quite right tODD, I was taking you to mean things differently. I think I could manage to wiggle a bit of technicality in there, about how if you’re saving a little bit of money doing A, but you could be saving more money doing B, then by doing A …., etc, but it’s not really applicable to what we’re talking about so it doesn’t really help me. I concede defeat! :-)

    Generally, I still have doubts that most people actually manage to save money making their own bread once time spent is considered, but since the only people here are making bread as much for enjoyment and health as for costs, it’s a moot point.

    Kerner, one of the things that almost always happens is that people drastically underestimate the amount of time they spend doing something they enjoy. If you feel like it, try a chess clock to see how much time is spent on a loaf of bread. I don’t know if it’ll come up to my guess of a couple hours over the course of a week (for 4 to 5 loaves), but I suspect it’ll be more than 10 minutes per loaf.

  • WebMonk

    Ah, I am shown the conflation of my ways! You’re quite right tODD, I was taking you to mean things differently. I think I could manage to wiggle a bit of technicality in there, about how if you’re saving a little bit of money doing A, but you could be saving more money doing B, then by doing A …., etc, but it’s not really applicable to what we’re talking about so it doesn’t really help me. I concede defeat! :-)

    Generally, I still have doubts that most people actually manage to save money making their own bread once time spent is considered, but since the only people here are making bread as much for enjoyment and health as for costs, it’s a moot point.

    Kerner, one of the things that almost always happens is that people drastically underestimate the amount of time they spend doing something they enjoy. If you feel like it, try a chess clock to see how much time is spent on a loaf of bread. I don’t know if it’ll come up to my guess of a couple hours over the course of a week (for 4 to 5 loaves), but I suspect it’ll be more than 10 minutes per loaf.


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