Jacob Becker
We all have our favorite foods and enjoy eating certain foods, however as we know prices for these items fluctuate over time and lucky for us now is the best time in the past five year to eat a peanut butter jelly sandwich. Along with the super healthy side effects it has also become one of cheaper options that can make a superb snack to eat during school, post workout snack, or if you’re really feeling interesting it could make an excellent option to pack for a picnic on the beach.
If you’ve ever walked through a pick n save I’m sure you looked at all the food and had the question all of us have had “what makes food cheaper or more expensive”? While that question is as complex as the milky way, if we look deeply at peanut butter we see why that creamy jar has remained cheap. The US has both a absolute and comparative advantage in producing peanuts because while we only have roughly 3 percent of the entire peanut growing population, we produce 10 percent of the world's peanuts (Peanut Country, U.S.A). This means we don’t have to worry about trading with other people and aren’t impacted by tariffs or any of the other trade barriers that could raise the price of peanut butter.
That means peanut butter should always be cheap then an educated man or woman may think, however inflations always tinkers the prices of goods. In 2011 the peanut butter jelly enthusiasts became fearful of what may occur in the future as the national CPI dropped lower than the CPI of peanut butter. This meant compared to the rest of the food items peanut butter was slightly more expensive than it normally is. Fortunately the demand for this fantastic healthy good didn’t drop because the demand is less elastic than one would think. Thats thanks to the many healthy qualities of this substance make you look as great as you feel. Fortunately for us, of the late peanut butter jelly prices have fallen in comparison to the rest of the foods. White bread prices have fallen 2.7 percent while Jelly has dropped prices by .7 percent and peanut butter 3.8 percent! In addition to these price drops, the CPI index for food has risen 2.3 percent in the past year (Food Production), making peanut butter jelly sandwiches cheaper now than ever.
(This graph shows national CPI levels to show how cheap peanut butter is currently)
If you’re as stoked as me about the cheaper price of peanut butter and jelly, you probably have grasp of how much money this could save you for college. A recent study found that the average high school student will consumer 1,500 pb&j sandwiches prior to graduating. With prices being where there are now you could save more money than thought possible, however there are some opportunity costs. As much as I love Peanut butter and jelly, I could be getting my second favorite, crescent rolls. So the choice is yours, do you want to eat boring crescent rolls or any other foods or indulge in a healthy, tasty and currently cheap peanut butter jelly sandwich?
"Peanut Country, U.S.A." National Peanut Board Peanut Country USA Comments. N.p., n.d. Web. 27 May 2015.
Food Prices Have Been Rising for Six Months in a Row, and Are up 2.3% from a Year Ago. "It's 'peanut Butter Jelly Time' as PBJ Prices Fall."CNNMoney. Cable News Network, n.d. Web. 27 May 2015.
This was a funny topic to read about and I guess I've never thought about peanut butter before. It would be interesting to see how much a college student could really save if they ate peanut butter jelly sandwiches on a daily basis.
ReplyDeleteJacob, that was an incredibly interesting topic that I would have never even considered writing about. That being said, you presented some well thought out information in a clear and straight forward manner. Also, I think that it would be interesting to look at food as a whole relative to the CPI to see if food is inflating more slowly than the national average of goods, and is therefore cheaper relatively.
ReplyDeleteThis is a great topic and is obviously something that we can all relate to. If I had one question it would be the CPI of complementary goods like white bread, jelly, even milk. Are they following a similar trend to peanut butter or are they going in the opposite direction?
ReplyDeleteInteresting topic! One comment I would make is that I'm surprised the demand for peanut butter hasn't dropped because there are so many other foods similar to peanut butter that are supposed to be healthier. Almond butter, cashew butter, and other nut butters, for example, have less calories and about the same about of protein. Also, do you think the next generation will live off of peanut butter and jelly sandwiches like our generation or will there be a new staple food for them?
ReplyDeleteI wonder if the reason food prices are increasing is because of inflation or because of an increase in demand for certain types of food. When you go out its annoying that a water and a salad is so much more money than something very unhealthy, but is it because healthy food is more in demand? If peanut butter prices are rising, what would a substitute be? Something will take its place and I'm wondering what this will end up being.
ReplyDeleteThis topic made me laugh! I like how you made such a light topic into an econ blog post! I had no idea that college students ate 1,500 PB&Js or that it was cheaper to make them now rather than a few months ago! But what if people could find peanut butter even cheaper in another country? Would people have to move in order to eat more PB&Js? I would also like to know exactly how much college students would save compared to other years. Wonderful topic and blog post! Thank you for sharing!
ReplyDeleteThis was a very lighthearted yet informative piece that I really enjoyed! I do love peanut butter and jelly sandwiches, so maybe I'll stick to those for the next four years when money is frugal. Also, it is upsetting how a water can be so expensive nowadays, but I believe that is simply because the cheaper items cost less money to make.
ReplyDeleteThis is a great topic to talk about because I'm sure that we eat a lot of PB&J Sandwiches a lot. It's shocking to see how much the price of peanut butter, jelly, and bread is going down. As we are heading into college we will have to be on our own so we will have to make food on our own. With that being said many will want to buy the cheapest food that they can buy. In this case it would be Ramen or PB&J Sandwiches. Many of us probably haven't thought of the economics of PB&J Sandwiches. Overall, I thought that this was a good topic that all of us could relate to.
ReplyDeleteI really enjoyed how much time and effort you put into this blog post about peanut butter. It's really cool to see how the price of such a small good can fluctuate over time. I also was really interested in the part about the prices of white bread and jelly decreasing as well, so maybe like you said peanut butter and jelly sandwiches are the food of the future.
ReplyDeleteJacob, I thought the topic that you chose was very interesting...it made me think about my eating habits and how much I cherish eating peanut butter and jelly sandwiches. I had no idea that we had an absolute advantage with peanuts, or that we had 3% of the peanut growing population here in the US. I wonder what else we have an advantage over, and what other countries have over us; or is there another country eyeing us up to catch us in the peanut butter game? I was also pretty excited with the amount of money I was going to save by just eating peanut butter and jelly sandwiches!
ReplyDeleteEnjoyed every minute of reading this. Jacob you really have a way with words when writing you kept me not only extremely interested because of the topic but managed to make all of it relevant to the topic. Mostly I enjoyed your talks about absolute and comparative advantages you made it very clear to understand what is causing the price to stay cheap for the most part.
ReplyDeleteIts interesting to me to learn that the United States is responsible for 10% of the worlds peanut butter population. It also stood out to me how many peanut butter sandwiches we eat before graduating. I wonder how many we eat in our lifetimes? It's good news that its cheap because it would be a shame if a day came I would have to throw out more money to eat the best sandwich in the world. Thanks for this invigorating article.
ReplyDeleteThis was a very lighthearted article with a lot of depth that I really enjoyed reading! I didn't realize the impact that peanut butter has on the economy. The study about how many peanut butter and jelly sandwiches college students eat before graduating was crazy to me; it seems like so much! The opportunity cost of buying peanut butter, with its lowering prices, can help college students save more money. Since I'm going to college in a few years, this is important to me, so this article was very informative. Great job!
ReplyDeleteI eat so many peanut butter and jelly sandwiches myself and I'm not really surprised that demand for peanut butter hasn't gone down, but I'm surprised that the US makes 10% of the peanut butter that we consume! I thought this article was fun to read and had many connections to class.
ReplyDeleteI enjoyed the humor and info in this article very much. Especially as someone whose diet primarily consists of Peanut Butter and Jelly, I am very happy to see that the Peanut Butter industry is doing so well in the face of such economic stress.
ReplyDeleteI enjoyed the humor and info in this article very much. Especially as someone whose diet primarily consists of Peanut Butter and Jelly, I am very happy to see that the Peanut Butter industry is doing so well in the face of such economic stress.
ReplyDeleteInteresting take on how peanut butter is affected by the economy. I did not know that the United States grows a lot of peanuts. While the humans in my family don't consume too much peanut butter, we go through costco sized jars of peanut butter because that's the only way my dog will take his pills. While some find peanut butter a delicious treat or feed it too their dog, I am sure everyone is happy with the relatively low sticker price.
ReplyDeleteI really like reading through a post that can make people think. Also, many thanks perfect human dietfor permitting me to comment!
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