Of course you can start a rumor in a heartbeat these days, especially when it comes to fuel/gas prices.
The roofer that I use tells me that the price of asphalt shingles will climb dramatically. Makes sense, lots of petroleum used in the manufacture.
I do know that natural gas prices have a great effect on the price of farm fertilizers. With the increased cost of moving food and groceries, we may take a hit at the store.
Greg
Replies
"I do know that natural gas prices have a great effect on the price of farm fertilizers. With the increased cost of moving food and groceries, we may take a hit at the store."
No danger of that. Farm commodity prices are set solely by supply and demand - Production costs have nothing to do with it.
Out of the amount you spend at a store, only a small percentage is actually the cost of the product. ost of it is processing and shipping.
The wholesale market prices of farm commodities are set by supply and demand just like lumber, but the retail prices are set based upon cost of goods+cost of shipping+Markup.
I tend to "bristle" at your suggestion that commodity prices are set via supply & demand even though economics states so in black & white. Just wonder how much your fertilizer bills have increased over the past years? Too often the prices incurred via farmers seems to be overlooked when product is sold. No black & white for the farmer; just green bucks to be forked over even if the sell price did not rise accordingly. What used to cost $5,000 to fertilize now costs $10,000+ for a small farm but did the farmers income double? It did not in this household though the big farms may have been able to recoup green bucks with subsidies.
Yes, we will pay more for the processing & shipping for our groceries, gasoline, etc. As to shingles, I'll learn tomorrow how much shingle price has increased since new construction began. Bricks & stone increased 2% today with more increases coming. Today's gasoline/diesel fuel costs may inevitably put many farms out of biz this year even though there are more & more people to be fed! Supply decreasing & demand increasing just hits us when we, as consumers, pay at the pump, grocery or wherever.
Every time fuel takes a big jump, my local shingle dealers add a fuel surcharge to the bottom line of the invoice (the last one was 2%). If fuel goes back down the surcharge goes away, but if not after a certain time the prices go up permanantly.
Birth, school, work, death.....................
I know that after Ivan hit last year, prices on materials were frozen for about two months, and then they rose about 30% for shingles overnight.
A friend of mine that works at a local GAF plant says they are still catching up from Ivan, and now Katrina's been through, you can realistically expect prices to jump again.
We've already added a clause to our contract stating we are not responsible for price increases between the time the contract is signed and the start of the job.
Jason Pharez Construction
Framing & Exterior Remodeling