Does Price Change Affect The Price Of Our Food?

Another cause for the decline in oil prices is caused by an increase in consumers purchasing more fuel efficient vehicles, such as hybrid or electric vehicles. In many countries today, especially in North America, there has been an increased demand for fuel efficient vehicles. This is evident in TV commercials which are advertising more and more vehicles that get 40 to 50 miles per gallon, and by the ever increasing commercials for electric vehicles. Consumers are tired of paying outrageous prices for oil and are demanding more for their money. As this demand continues to grow, the demand for oil will decrease.

Oil is the product that each and every one of us use. It can be used for fuel, heating and even cooking. The most often known for unstable price is crude oil or gasoline. According to the The Economist, The main reason for price shifts of oil is oversupply. The oil production in Saudi rose 10.3 million barrels per day. This increase is the effect of a new method that I being applied to oil extraction. This method is called fracking, fracking is where they drill into tight-rock formations then gradually turning horizontal for several thousand feet more. This results to accommodations to multiple oil wells. This new approved method of oil harvesting has raised the productivity gains and reduced the cost of harvesting oil.

Oil price increases are generally thought to increase inflation and reduce economic growth. In terms of inflation, oil prices directly affect the prices of goods made with petroleum products. As mentioned above, oil prices indirectly affect costs such as transportation, manufacturing, and heating. The increase in these costs can in turn affect the prices of a variety of goods and services, as producers may pass production costs on to consumers. The extent to which oil price increases lead to consumption price increases depends on how important oil is for the production of a given type of good or service.

The demand of gasoline has increased steadily over the last twenty years. In 1981 the U.S. averaged 6.5 million barrels of gasoline consumption per day. By comparison, in 2004 the U.S. averaged 9.2 million barrels of gasoline consumption per day. For most of this time period, gas prices stayed relatively the same. This is because the U.S. refineries increased their production to meet the demand and maintain the equilibrium price. Also during this same time period worldwide demand for crude oil increased 27%. Crude oil producers also increased their production to meet the demand keeping prices the same.

How does America’s current food economy almost force consumers to partake in dangerous food practices?

If a retailer prices its gasoline too high, and without regard to competition, the retailer's customers may take their business to another station with lower prices. If a retailer loses enough volume, the retailer may then reduce prices in order to retain its customers. When more people are on the road, typically in the summer months or during holidays, the price will increase. Crude oil is the greatest contributing factor when it comes to the price of gasoline. The resources it takes to remove it from the ground, then transport it, and then refine it are the factors involved in pricing. The Organization of the Petroleum Exporting Countries has a big part in the price as well in both in the United States and around the world. Speculation of oil commodities can also affect the gasoline market. The second major factor that contributes to gasoline prices is refining. Oil refining is done by heating the oil with steam and only about 40 percent of what remains is gasoline. To produce more refineries must chemically change some of the other products that were produced. Distribution and marketing makes up the remaining 5%. The price of transporting crude oil to a refinery then gasoline to a point of distribution is passed on to the consumer. In addition the price to market the fuel brand is passed on to the consumer as well. Other factors affect gasoline prices such as extreme weather, war or natural disaster in areas where oil is produced can also in turn

Oil is one of the most important natural resources known to mankind. For most societies in the world, oil is the principal natural resource that fuels their economies. Then why, in this great age of communication and technology, do we need to be concerned about a natural resource like oil? Simple. Nearly 98% of everything you have or do is in some way related to crude oil. Heat for your home, gas for your car, 2 liter plastic bottles for pop, and petroleum jelly are just a few examples of products created from crude oil. The United States has the greatest standard of living in the world, as well as the largest economy. Why? Because we have always tried to maintain control over the supply, as well as price, of oil. Over the last 10 years, the U.S. economy has undergone the largest economic expansion in history and cheap oil has fueled this unprecedented growth. (Faulkner)

Food price rises have been affecting the whole world. However the United States has been one of the countries that has been majorly affected. A major cause of the food price rise has been the drought affecting California, the state that produces the most crops for the nation. Watering fields of crops require massive amounts of water that California simply does not have, for example, according to Upfront Magazine three mandarin oranges require as much as 42.5 gallons of water and a bunch of grapes requires about 24 gallons. California governor Jerry Brown has ordered a reduction of water use of its residents by 25%, hoping that this cutback will prevent the drought from worsening. Aside from residents being required to reduce the amount of water

Figure 5 shows how the United States has a developing oil production that U.S. is the largest oil consumer in the world. When the largest consumer produces a massive amount of oil it will influence many countries that depend on the revenue budget from oil exports. “The United States added almost 1 million barrels per day of oil production between 2012 and 2013” (Ratner, Tiemann, 2015, p6). With this production of the United States effects the oil prices in the global because the U.S. imports oil decreases and the supply of oil in the world increases.

There are two primary factors influenced the market of energy: population and economic output (Exxon Mobil, www.exxonmobil.com). According to International Energy Agency (International Energy Agency, www.oilmarket.org) global oil product demand will rise up from 84.5 mb/d in 2006 to 86.1 mb/d in 2007, and in forecast for 2030 will grow 1.8% per year. The world oil prices are forecasted to decline from $68 per barrel in 2006 to $49 per barrel in 2014, then rise to $59 per barrel in 2030 ($95 per barrel on a nominal basis). Total world liquids consumption rises to 118 million barrels per day in 2030.

In the anticipation for an increase in the prices of various commodities, it is important for the organization to consider the costs of the materials used in making the product. Since the raw materials for the low calorie and frozen microwaveable food company have increased in price, the cost of product is expected to rise and therefore, the organization needs a plan in order to assist in setting the price to keep the customers happy in the market.

The US consumed 142 billion gallons of gasoline in 2007 and the tax applied on it is 18. 4 cents on one gallon. All around the US, there are around 162,000 retail gasoline outlets. With the price of crude oil hovering around $100 a barrel, it is no wonder that concern is growing about the gas prices being so high. After all, modern economies are kept moving by this lifeblood. For instance, in the United States alone personal vehicles consume more than 140 billion gallons of diesel fuel and gasoline per year.However, there are several factors that contribute to the gas prices being so high. Given below are a few of them. Increasing Demand for Oil One of the main catalysts for the incessant rise in gas prices has been one of the most

Political events in the Middle East saw Iraq invade Kuwait, as a result oil sanctions were applied to the output of both countries by oil consuming countries. Other oil producing countries feared of a major shortage in supply as prices rose from $18 to $40 a barrel; as a result other non-OPEC countries reacted by increasing production in oil. Prices fell back as overall supply returned to normal. Since the successful counter by the US to retake Kuwait, the price of oil has seen a steady drift downwards in price. This has also led to OPEC losing out due to more countries increasing production in oil; causing an increase in competition.

There are currently two types of food systems that exist in our food shed. TINA, which comes from Maggie Thatcher, who said, “There Is No Alternative” to global economy—T-I-N-A” (Shuman, 2002). And LOIS, which stands for “Local Ownership and Import Substitution” (Shuman, 2002). TINA is the system that has been used for the pasted 60 to 70 years, and throughout that time the way we produced are food has become both productive and efficient; but it has also become destructive and unhealthy. In A TINA-based food economy, food is either mass produced through the process of industrial farming or it is imported from other countries. These lead to adverse effects on the food, the environment and the economy. However, in a LOIS-based food economy, food is “produced locally through locally owned businesses, then the more you can minimize your vulnerability to nasty surprises, the more you can maximize your economic multiplier, and the more you can maximize tax proceeds to the public sector and the many good things that come from it.” (Shuman, 2002). So in simpler terms the more you produce locally, the better local economies will be and if local economies have a large income then the nations income will increase by way of tax. Along with being good for our economy, LOIS has little to no adverse effect on our environment or health. Compared to TINA, LOIS looks like paradise, but just like every dream world, the LOIS system is currently an impossible system to live by.

Because private companies and nations have over-estimated oil reserves it is difficult to be exact but these estimates of world oil reserves are close and further research will reflect this. Also, rapid exploitation may have damaged many reserves' wells and will limit production. It may be that we (the world) have much less than is believed! The United States past its "peak oil" point back in the early 1970's ( for further research refer to Peak Oil Crisis Books) and now imports about two-thirds (2/3) of its oil. The U.S. economy and the current American way of life is supported by energy from other nations. Those nations that have not already past peak oil (maximum production) are very near it. In the future, production will decrease while at the same time demand increases. The spread between supply and demand will cause higher prices (for all products),