Here’s Why We Will Be Paying More For Food Soon

Buz Ozburn, a truck driver who frequents Baen’s Bar, sen the following. It explains why we will all be paying much higher prices for food soon.

Wanted to wish all my fellow flies a Happy Thanksgiving.

But keep in mind, as you munch you turkey bird, that you might not be able to afford that same bird, come Christmas.  Trucks brought you that turkey, you are eating, and the cost of operating a truck, in the US, is becoming prohibitive.

The cost of diesel, is reaching all time highs (see this for example http://www.pilotcorp.com/Locations/Location.aspx?location_id=381&Title=%23381+Hesperia%2c+CA )

Personally, I’m making out OK on the fuel cost, for operations, as I’m getting a fuel surcharge (this week) of $.38 per mile based on 5.5 MPG … and I get around 6 MPG, with my tractor.

But fuel cost, for operations, is just part of the story.

It trickles slowly through the whole economy … everything goes up; from the hamburger, at the local “choke n puke”, to the cost of milk, in the grocery store.

So while I’m doing Ok, on operational cost; the cost of living “on the road” is becoming almost too high to bear.  For ex., a breakfast of 2 eggs, bacon, hash browns or grits, toast, and coffee, now runs almost $12.00 at most truckstops.

So while I can afford to feed my truck, because of the fuel surcharge … I can’t afford to feed myself very well, any more (if I was just depending on my income from driving a truck… Thank goodness for my retirement income).

And guess what?

You guys are going to start seeing a drastic drop in Owner/Ops (like me) on the highways and byways of the nation.  It is already starting to be felt by some of the major toll roads’; they’ve already noticed a 1.1% drop in truck traffic, over the last couple of months.  Guess who is going to be taking up the “short fall” in revenue for those toll roads?  That’s right … the average motorist. (see http://www.landlinemag.com/todays_news/Daily/2007/Nov07/111207/111607-01.htm  )  Their “operating expense” isn’t going to change that much; whether the Big Trucks are out there or not.

Right now, I know of about 30 fellow owner-ops, who have just decided to “park it”.  And it is going to get worse … as diesel continues to rise; along with the expense of living on the road.

There are several reasons, you may not be aware of, that is really BAD NEWS for the public, at large.

Are you aware that owner-ops (Independent Contractors) move about 80% of all the freight on America’s highways?  Oh yeah, there are a lot of big companies, with thousands of trucks …. but the owner-ops (ICs) dwarf them all, on both productivity and numbers of units in operation.

And then the question, that begs an answer, is why is diesel more expensive then regular gasoline, even premium?

Diesel is a “byproduct” of the gasoline distillation process.  (see http://api-ec.api.org/classroom/tools/upload/oilfacts_rgb.pdf ) So while there is less diesel per barrel, then gas … there is definitely more gasoline produced … and therefore the diesel by products are being produced anyway.

So what gives?

Some folks, including me, believe that there’s something bad wrong with the system right now.  And we don’t necessarily believe that the “big oil companies” are the villains of this mystery.  Besides, anybody can participate in the Big Oil Co.’s profits by simple buying their stocks.

Nor do we necessarily believe that OPEC is to blame … as their price per barrel is set on the world “spot market” (an open market mechanism).  And the recent headline, about OPEC refusing to up production, isn’t at fault … cause there just isn’t anymore refinery capacity, at least in the USA, to distill the crude with already available.  So increasing production, at the well, wouldn’t really increase the output of gasoline or diesel available at the pump.

So yes, enjoy your Thanksgiving, the prospects for Christmas are getting bleaker by the day.

Just a thought you should ponder this little problem, after you’ve gobbled your turkey for Thanksgiving.

Respectfully Submitted;

Buz Ozburn
2005 Freighliner, on America’s highways