It’s Time to Lay in Stocks, Prices Are about to Rise

April 26th, 2011

Four-dollar gasoline is just a part of it.
You guessed it: On top of all the ongoing bad news we are about to be hit by price increases as companies pass along the higher costs of raw materials, transportation and other expenses. When prices at the pump rise and wages don’t, already strained budgets show the pain,” says Diane Swonk, chief economist at Mesirow Financial in Chicago. Let’s take a look at some areas where prices are rising. More hints of what’s in store are due as corporations report quarterly earnings over the next several weeks.

Airfares
Airlines have been raising ticket prices steadily to pass on the expense of higher fuel costs. Domestic round-trip fares were boosted a half dozen times this year by $4 to $10 each. Over the six months that ended in February, fares jumped 22%, according to the Bureau of Labor Statistics’ index.

Chocolate
Hershey’s raised its wholesale prices nearly 10% in late March. Consumers may not feel the pinch until after the big Easter season, because many retailers will be able to make purchases at the old prices for about eight weeks.

Coffee
Coffee prices jumped 27% between December and March as companies passed along their record cost of unroasted beans. Starbucks boosted the prices it charges retailers for packaged coffee up to 12%. J. M. Smucker, which sells Folgers and Dunkin’ Donuts brands, has raised prices several times during the past year. Sara Lee, Kraft Foods and Green Mountain Coffee Roasters also have hiked prices.

Fast Food
McDonald’s, like many of its peers, is dealing with higher ingredient costs and expects to raise U.S. prices this year. Rival Wendy’s/Arby’s is expected to raise prices later this year because of what it says will be 15% higher beef costs.

Fruit and Vegetables
Even adjusting for seasonal factors, the cost of fruits and vegetables has risen 23% in three months, including bananas up 10% and potatoes up 39%.

Gasoline
$5 gas, anyone? Not yet, but it may be coming. Gasoline prices leaped 6% last month and have risen 28% in the past year. Consumers paid an average price of $3.81 a gallon nationwide on Friday, according to the travel group AAA.

Household Products
Diapers, soap, toilet paper, toothpaste, trash bags and many other everyday items all have been targeted for price hikes as companies from Kimberly-Clark to Procter & Gamble to Colgate-Palmolive respond to rising ingredient costs.

Juice
Tropicana, owned by PepsiCo, raised prices on some of its juices 4% to 8% to cope with higher costs due to cold weather damage of Florida citrus crops. That means shoppers are paying more for Tropicana and Dole fruit juices.

Packaged Foods
Rising prices for corn, wheat and many other ingredients, along with fuel, have led to higher prices for packaged goods. Safeway, Supervalu and other supermarkets are passing the higher costs along to customers.

Soft Drinks
Big beverage makers are hiking prices because of higher costs for packaging, ingredients and transportation. The price of carbonated drinks was up 14% from December to March.

Tires
U.S. tire prices climbed 6% in the six months ended in March. Cooper Tire & Rubber boosted prices 8% to 9% last month. At the time of the announcement the company said natural rubber prices had increased more than 75% in a matter of months.

This entry was posted on Tuesday, April 26th, 2011 at 3:19 am and is filed under Economy, Finance, Money, Personal / Internet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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