While we know all too well that most commodities have risen in price so far in 2008, how much has it cost consumers? We set out to answer this question by calculating the price change of the major food and energy commodities in the CRB index (Corn, Soy, Wheat, Cattle, Hogs, Oil and Natural Gas) and multiplying these changes by the annual per capita consumption of each item. While this method may oversimplify the actual costs, it provides a good idea of how changes in commodity prices have impacted consumers in the wallet.
As shown in the chart below, the rising price of these commodities works out to an average cost of $1.77 per person per day. While this may not sound like much, it adds up to almost $650 per year, or 1.34% of median household income. Compared to where we were, however, the current hit to the wallet feels like chump change. At the peak on July 3rd, the hit to consumers from rising commodity prices was almost $5 (there goes the afternoon coffee at Starbucks), which translates to about $1,750 per year, representing over 3.5% of median household income. Let's hope the line continues to fall and not rise.
