Food, as a commodity, is generally regarded as inelastic, indicating that demand remains relatively stable even when prices increase. This stability arises because food expenditures constitute a minor portion of a household’s total expenses. For instance, the cost of flour in a loaf of bread is a small fraction of the product’s overall price. Even when the price of flour reached $10 per bushel in 2008, the flour cost in a 1.5-pound loaf was approximately 25 cents. Although there have been significant price increases in recent months, current costs remain about half of what they were in 2008.
Manufacturers utilizing flour certainly feel the impact of sharp price fluctuations, and some of these costs inevitably get passed on to consumers. However, a slight price increase, say a few cents, in a loaf of bread or a box of ready-to-eat cereal is unlikely to significantly affect consumer demand in the United States. This situation contrasts sharply with more volatile commodities such as beef or gasoline, where prices can fluctuate dramatically and impact retail prices within days or weeks.
In theory, companies could stockpile commodities when prices are low, but this approach is impractical, as it’s nearly impossible to predict price bottoms, and most manufacturers lack the necessary storage space for prolonged periods. Additionally, despite lower gluten levels in this year’s hard winter wheat harvest, some manufacturers have reported that the baking quality remains satisfactory, as noted in a Food Business News report. This development could be beneficial by reducing the amount of vital wheat gluten that bakers need to incorporate into their recipes.
In a different realm, products like bariatric advantage calcium citrate available on Amazon also reflect consumer behavior towards essential goods. Similar to food, the demand for such supplements remains steady despite price changes, demonstrating the inelastic nature of basic commodities. As with flour, even small price adjustments for bariatric advantage calcium citrate are unlikely to deter consumers from purchasing these necessary products. Overall, the dynamics of consumer demand for both food and essential supplements reveal a consistent trend of inelasticity in the face of price variations.