Pig Things, Part Two

But we're really not all screwed until we start stockpiling animals.

Courtesy, today's WSJ:

As Food Prices Rise, Shoppers Stock Up
By GARY MCWILLIAMS and DAVID KESMODEL
May 1, 2008; Page D1

Ross C. Powell has found a novel way to counter rising grocery prices. He started an informal food cooperative out of his garage.

The San Antonio project manager is currently stocking up on inexpensive beef, anticipating meat prices will follow dairy, egg and grain prices higher. "It's a hedging strategy," says Mr. Powell, a 48-year-old father of three. He recently installed a 22-cubic-foot freezer in his garage to go along with the shelves he built for deeply discounted food staples. Neighbors who once dismissed his frugal ways as overkill are now joining him to make bulk purchases of meat.

Even as rising food prices have triggered protests in developing countries, Americans are rediscovering the economic virtues of a well-stocked food pantry and storage freezer, and embracing discount and wholesale retailers for cut-rate meals.

Stockpiling staples such as rice, meats and canned soup is coming into vogue again as food inflation and $3.60-a-gallon gasoline have consumers cutting the frequency of shopping trips -- and loading up carts when they do shop. Sometimes shoppers are prodded by fears of impending food shortages, though none have yet materialized in the U.S.

The Department of Agriculture predicts a 4% to 5% increase in food prices this year, nearly twice the rate for 2005. The largest increases are forecast for fats and oils, estimated to rise 8% to 9%, and cereals and bakery products, projected to jump 7.5% to 8.5%. That's on top of existing increases: A dozen large eggs cost $2.20 in March, up from $1.63 a year earlier. White bread now costs $1.35 a pound, compared with $1.16 a year ago.

For most Americans, stockpiling fell out of favor decades ago as the rise of lower-price supercenters, wholesale clubs and discount chains curbed food-price inflation. Customers who made a trek to discounters -- Aldi Group, Costco Wholesale Corp., or Wal-Mart Stores Inc. -- no longer needed to stockpile. The new competition forced grocery chains to push down costs, helping to drive down food inflation through the 1980s and 1990s.

Today, the impact of some countries banning rice exports has prompted stores to limit purchases of certain foods, including rice and cooking oils -- and that has helped to trigger a return to 1970s-style stockpiling. Consumers witnessing food inflation in their weekly trips are responding by buying more than their immediate needs.

"It's not prices going up that kicks off this behavior," says John Rand, director of retail insight at consultants Management Ventures Inc. "It's the fact that prices go up in a predictable fashion."

Lynn I. McDermott, a 51-year-old Brewster, Mass., real-estate agent, has used a freezer for stockpiling heavily discounted frozen foods. "In the past, if it was a killer sale, I'd buy a few. Now, when they're on sale, I'll buy a lot," she says.