10 THINGS THAT ARE REALLY EXPENSIVE RIGHT NOW
Used cars and frozen turkeys aren't as cheap as they used to be...
With the economy still suffering, demand for goods has been generally low. Combined with low availability in many cases, this has forced the prices of a number of goods to inch toward new highs. Here are 10 products that are at or near their all-time greatest costs:
The price of wholesale, frozen Turkey reached an all-time high last week of $1.09 per pound, well above previous records. The new peak arrives just in time for Thanksgiving, and is due both to record low demand and record high feed prices. (Demand for turkey is expected to reach a 22-year low, at 16.2 pounds per capita. In order to maintain competitive sales and provide the expected holiday discounts, grocers will likely take a significant hit in sales margins.)
Cotton Futures hit an all-time high last week at $1.58 per pound, well above historic prices. Cotton has reached its peak as a result of severe export shortages in China, the world’s largest producer and consumer of cotton. If the price continues at this rate, the cost of production of clothing and textiles is bound to increase. Major distributors are expected to raise prices to account for the rise. Suppliers to stores like The Gap and Walmart report they will increase prices between 5% and 30% in the coming months.
3. Used Cars:
Last month, the average price of a used vehicle reached an all-time high of $15,870. One likely reason for this may be the decreased expendable income among potential buyers. New car sales are down significantly from a few years ago. A second reason for the record prices is last year’s “Cash For Clunkers” program, which took nearly 700,000 used vehicles – which would otherwise have been resold – off the market. Americans are increasingly seeing used cars as a smart financial decision. If this trend continues, Chrysler, Ford, and GM may take further hits to their balance sheets.
Last week, the price of gold hit an all-time high of more than $1,420 per troy ounce. The precious metal has historically been used as a hedge against an uncertain economy or a weak dollar, which explains why it has roughly tripled in value in the past five years. The Fed’s quantitative easing measures are expected to weaken the dollar, which will help support the price. While it is most known as an economic safe haven, gold is also an important component in consumer electronics. If the price remains at this rate, large microchip manufacturers like Intel and Advanced Semiconductor Engineering will likely be forced to increase prices, affecting the cost of everything from laptops to smartphones.
College tuition seems to increase in any economic climate, and it has done so throughout the decade, with some private schools reaching tuition of more than $50,000. In the last ten years, the average tuition of a public four-year college rose 5.6%, compared to a 3.3% increase in the previous decade. Private 4-year colleges experienced a 2.8% increase in the last ten years. While the percentage of Americans who attend college has historically risen unchecked, record-high costs and the recession may have a strong impact, causing some to opt out of college and go directly into the workforce.
In September, FedEx announced the average price of domestic package and freight shipping would increase 5.9%. Last month, UPS announced the same increase for their U.S. freight shipping. The implications of increasingly expensive shipping near the crucial holiday shopping season could be disastrous for retailers. Increased overhead will damage what will already be a lackluster performance from retailers as recession-weary consumers continue to be frugal.
7. Prescription Drugs:
According to a 2010 AARP study, the average price of the most popular prescription drugs has increased 41.5% since 2004. This is significantly higher than the rate of inflation over the same period, at 13.3%. The pharmaceutical industry attributes the high prices to the ever-increasing cost of research and development. Analysts suggest that the prices are also increasing due to marketing efforts of companies trying to differentiate themselves in a crowded market. At the beginning of this month, the congressional budget office reported that medication costs were likely to rise as a result of the March health care bill.
8. Ground Beef:
While the price varies by state and quality, the average price of ground beef is either near or above all-time highs across the U.S. The rise in costs is largely due to an increase in corn prices, which has made cattle production more expensive. The high price of beef is going to have a major impact on restaurants which rely on inexpensive, mass-produced commercial-grade beef to maintain low prices. Fast food corporations, including Burger King, Wendy’s/Arby’s, and McDonalds, are being hit hard. McDonald’s recently announced it would raise prices on many of its more popular menu items in the coming months.
9. Checking Accounts:
According to Bankrate.com’s 2010 study, the cost to maintain a checking account in the U.S. is at an all-time high. Included in the new highs are overdraft fees, which have reached a record average of $30.47, and minimum required balances, which are up by more than 34% from just last year. The increased fees banks are charing their customers may be linked to a need for liquid capital. This doesn’t seem likely to affect consumer behavior much, as most of these costs, particularly charges from ATMs and overdraft fees, are avoidable.
10. The Most Expensive Porsche:
The American Economy is still recovering from the worst recessions in decades, but as long as the country maintains its business elite, producers of high-end luxury items will continue to outdo themselves. For example, Porsche just sold out of 500 of its limited edition 911 GT2 RS, 133 of these going to Americans. At a $329,000 retail price The GT2 RS is the most expensive of its make ever sold. Do not expect the car to hold this honor for long.