Getting Conned in the Oil Aisle
Prep to cook more than 1,000 meatballs for QI’s annual Festa di Natale Annuale was disrupted Sunday amidst a dearth of canola oil, at least the 4.5-gallon size. Made from the seeds of a plant called rape, of the turnip family since the Industrial Revolution. Rapeseed oil made its bones as a lubricant for ships and steam engines, which, unlike most oils, stuck to wet metal. In 1978, the word “Canola” was born to describe a derivative of rapeseed oil with significantly less erucic acid. As it was developed in Canada, the etymology was geographic -- Canadian oil, low acid. I knew not to substitute the gigantic corn or soybean substitutes at Sam’s Club because they’re notoriously saturated. So, I did a quick search to find the best alternative. I won’t share everything I found at the bottom of the rabbit hole. Google that on your own. The bottom line: Canola is processed just as its corn and soybean counterparts are – in hotter than hell heat, with the bonus of toxic solvents.
As for the “solution,” that would be Light Olive Oil, as opposed to that of the Extra Virgin variety --the former has a higher smoke point of 465-470°F, which makes it ideal for high-heat cooking. Retained is the Mediterranean methodology of coldpressing, which protects against heart disease and a whole host of other scary possibilities left at the bottom of the above-referenced rabbit hole.
The good news, for the U.S.’s lowest income earners, is that a path has been forged to afford as much olive oil as their hearts desire. The problem is, many have no interest in salubrious solutions, but rather resolving the conundrum of being overly exposed to the grocery store and underexposed to the Rest of the World of goods and services.
You may recall that Sunday, August 16, 2021 did not start well for the current administration. The Taliban had collapsed in a fraction of the time it originally envisioned. In his defense, Biden said, “I stand squarely by my decision” to withdraw U.S. troops from Afghanistan.
It’s unlikely I would recall another headline crossing had I not been at Camp Kotok in Maine with a group who rival me in the politically cynical department. At the exact moment international fury spread unchecked, the U.S. Department of Agriculture’s (USDA) released its reevaluation of the Thrifty Food Plan, conveniently catalyzed by an executive order Biden had signed way back on January 22, 2021. Per the USDA, in October 2021, recipients of the Supplemental Nutrition Assistance Program (SNAP), the universe of which exploded after the pandemic hit, would get a 25% bump to their benefits -- the single largest permanent increase in SNAP benefits in the program’s history.
The average household benefit had already risen from $168 in February 2019 to a peak of $462 in May 2021 (green line). We only have data on hand through August but observe the October print won’t be accommodated by the left chart’s scale when the data hit. A pure extrapolation from August’s $427 puts the number that started in October, which fell on the heels of the rental eviction moratorium’s expiration, makes the average household’s take at $534 a month. Add this to the 90% (61 million of the nation’s child population of 73 million as of 2019, which has since contracted) of U.S. households that receive an average of $550 a month in the child tax benefit and the “mystery” of wage inflation in the lowest-paid occupations vanishes.
But there’s more to this story, which returns us to those who see life offering so much more than food. Allow me to relay a story of commerce in America I picked up on in last week’s swing through my alma mater’s home of Austin. Big balances on SNAP cards, which are debit cards at grocery stores -- for food, and food alone – are a new means of exchange. Find a relative with too much cash on their hands and exchange your card with an $8,000 balance for 50-cents on the dollar. Voilà! You can now consume whatever $4,000 will procure.
As for that relative with fresh groceries cash on hand – filet mignon might top the list. Be prepared if that’s your proclivity given beef inflation was up 21% year-over-year (YoY, yellow line) in November. For those more cholesterol-wary favoring grilled chicken or an egg-white omelet, those prices are “only” up 13% YoY. And it’s a raging bargain vis-à-vis things that go “Moo.” Overall, Food at Home inflation (red line) is up 6.4% YoY, the highest since December 2008.
It's likely that middle-income earners, who don’t qualify for SNAP, are unimpressed with what little they can afford to put in their pantries and fridges. Per the University of Michigan, at 25, June 2008 was the last time Bad News Heard on Prices (purple line) was so high. As for households’ Conviction Score – the standard deviation of ‘better’, ‘same’ and ‘worse’ responses, a measure of dispersion -- on the outlook for the economy at this time next year (orange line), at 2.6, the best that can be said is that it’s bounced off May 2021’s record low in a series dating back to 1978. But it remains severely depressed, meaning households don’t really know which way things are going next.