Vol. 4, Issue 5, May 16, 2006
Postum Prices Rising in Lockstep With Crude Oil
Oil prices, and gasoline prices, have been rising so precipitously for so long that the public has become obsessed with the daily ups and downs of crude oil prices. Policymakers, pundits, and economists have all subjected the price of oil to intense scrutiny in an attempt to explain the rise in costs and, as a result, figure out what to do about it.
"With gasoline pushing $3.50 a gallon in many parts of the country, there's a lot of pressure to understand the cost trends and isolate the real cause of the issue," said Mark Peterson, a Minneapolis economist. "This rise in price has had a lot of consequences for America, some of which are profoundly disturbing."
The most disturbing consequence for Peterson came to light when he was balancing his checkbook and going through some receipts.
"I was going through the grocery bills and I thought they seemed high," he said. "That's when I realized what's happened to the price of Postum. It was a bit of a shock."
Postum is a powdered coffee substitute sold by the Post Cereals company. The caffeine-free beverage mix was originally created by company founder C. W. Post in 1895 and marketed as a healthful alternative to coffee. Peterson is a long time Postum drinker. That's why he was stunned to realize that Postum prices have risen in direct proportion to gasoline prices over the past year.
"I drink three cups a day," he said. "I was curious, so I did a deeper historical analysis of crude oil and Postum price trends. They align perfectly all the way back to 1895. Makes you think, doesn't it?"
Kraft Foods, which distributes Postum, was quick to dismiss Peterson's analysis as a "malicious" and "flawed" "example" of "coincidence", "we mean it".
"Postum is entirely all-natural," insisted Eli Trebain, a Kraft company spokesman. "I don't drink it myself, but I am assured that C.W. Post himself drank a quart of Postum a day, and it didn't do him any demonstrable harm. I mean, coffee is brown too, and I don't see people making unsavory allegations about what's in coffee."
"Post died at 59," countered Peterson. "And since crude oil is a fossil fuel, originating in the distant past as organic matter, I would bet anything that the FDA would allow it to be listed as a "natural flavor" in an ingredient list."
However, while Postum prices are at record highs, having more than tripled since 1998, it seems that, as with gasoline, consumers are just continuing to grit their teeth and pay the higher cost, blithely ignoring any health concerns.
"It's still cheaper than Starbucks," said Peterson.