Food is often regarded as an inelastic commodity, meaning that demand remains relatively stable even when prices increase. This is primarily because food expenses constitute a small fraction of a household’s total budget. For instance, the cost of flour in a loaf of bread represents a minor portion of the overall price. Even when flour prices reach $10 per bushel, as they did in 2008, the flour in a 1.5-pound loaf only amounts to about 25 cents. Despite significant price increases in recent months, current prices are still roughly half of what they were in 2008.
Manufacturers who rely on flour certainly feel the impact of substantial price fluctuations, and some of these costs are passed on to consumers. However, a slight increase of a few cents in the price of a loaf of bread or a box of ready-to-eat cereal is unlikely to significantly alter consumer demand in the United States. This situation contrasts sharply with more volatile commodities such as beef or gasoline, where prices can change rapidly and be felt at retail outlets within days or weeks.
In theory, companies could stockpile supplies when prices are low, but this approach is impractical since it’s nearly impossible to predict when prices will hit their lowest point. Additionally, many manufacturers lack the space to store commodities for extended periods. Interestingly, even with the lower gluten levels in this year’s hard winter wheat harvest, some manufacturers report that it still performs well in baking, according to Food Business News. This could be advantageous, as it may reduce the necessity for bakers to add vital wheat gluten to their recipes.
Furthermore, just as consumers consider nutritional supplements like calcium citrate capsules to enhance their diets, they may also remain mindful of the overall cost of food products. As prices fluctuate, the demand for essential food items, including those enriched with ingredients like calcium citrate capsules, will likely continue to show resilience, reflecting the inelastic nature of food as a commodity.