WBEZ | prices http://www.wbez.org/tags/prices Latest from WBEZ Chicago Public Radio en Why does Chicago still have such high gas prices? http://www.wbez.org/news/why-does-chicago-still-have-such-high-gas-prices-107356 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/Chicago gas explainer.jpg" alt="" /><p><p>It&rsquo;s Memorial Day weekend, which means more people are hitting the road...and slapping their foreheads when they see the price at the pump. Especially in Chicago.</p><p>According to a <a href="http://www.lundbergsurvey.com/csp_c.aspx" target="_blank">recent Lundberg Survey</a> the price of a gallon of gasoline in the United States rose sharply in the last two weeks because of outages at Midwest and West Coast refineries</p><p>But gas prices in Chicago are often higher than the rest of the country. Higher than New York, Los Angeles &mdash; even Hawaii.</p><p>But why? Chicago isn&rsquo;t far from oil-rich Canada and there&rsquo;s a huge refinery right next door.</p><p>Even longtime Chicagoans don&rsquo;t seem to know why gas is so expensive in the city.</p><p>&quot;I don&rsquo;t know? I think people in high office do what they want and we just have to go with the flow,&rdquo; said Kuri Roundtree, who pulled into a BP gas station at Roosevelt and Wabash in the South Loop earlier this week. &ldquo;I think it&rsquo;s ridiculous. It costs me $70 dollars to fill up my SUV. I&rsquo;m sure I&rsquo;m not the only person complaining about this gas. All of my family members hate going to the gas station.&quot;</p><p>Finding the answer to Chicago&rsquo;s expensive gas mystery is actually not that obvious.</p><p>&ldquo;Chicago is unique for a few different reasons. Even prices outside our region could be going down while our prices are going up,&rdquo; said Patrick DeHaan, senior petroleum analyst for GasBuddy.com.</p><p>DeHaan says many factors that help set gas prices for the entire country are simply out of our control. For starters, the sky high price of crude oil on the global market.&nbsp; Thanks to demand in Asia, turmoil in the Middle East and good ol&rsquo; Mother Nature &mdash; like the flooding we experienced earlier this month.</p><p>&ldquo;There&rsquo;s nothing really to fix,&rdquo; DeHaan said. &ldquo;That&rsquo;s just the way the free market works with gasoline. Prices go up and down.&rdquo;</p><p>Still, if you live in Chicago, it&rsquo;s usually up.</p><p>Another reason for this is the process of refining the crude oil before it gets to the pump.</p><p>There are four refineries that generally serve the Chicago market, including BP&rsquo;s massive refinery in nearby Whiting, Indiana, right across the state border.</p><p>The Whiting refinery has been around longer than there have been automobiles. It was part of John D. Rockefeller&rsquo;s Standard Oil empire in the late 1800s. Of course, it&rsquo;s more expensive now to refine crude oil than it was back then primarily because of environmental regulations.</p><p>You&rsquo;ve probably heard about the cleaner burning &ldquo;summer blend&rdquo; that the Environmental Protection Agency requires for cities like Chicago.</p><p>&ldquo;Summer gasoline, or gasoline with a different RVP, is a different formulation. You can&rsquo;t use some of your lighter ends, such as your butanes to add to the volume of the gasoline, because it would evaporate out in the higher temperatures so it is more expensive in the summer,&rdquo; said BP Whiting senior spokesman Scott Dean.</p><p>Unfortunately for Chicago&rsquo;s gas customers, the city&rsquo;s close proximity to the BP Refinery doesn&rsquo;t help much in keeping costs down. Dean says that&rsquo;s not how wholesale pricing works.</p><p>&ldquo;It&rsquo;s called the rack price,&rdquo; Dean said. &ldquo;The rack price is what the tanker truck driver who may be representing any number of companies, will go, will get the fuel, will pay whatever the rack price of what they&rsquo;ve agreed to. And, the retailer will then determine the final price that they sell on the street.&rdquo;</p><p>Customers may also have a desire to blame gas station owners for the high price of gasoline. But Beth Mosher, spokeswoman for AAA Chicago Motor Club, says it&rsquo;s not their fault.</p><p>&ldquo;Everybody wants to take it out on their local gas station owner why these prices are so high,&rdquo; Mosher said. &ldquo;But the reality is when the prices are this high the profit margins for these gas stations are so thin, they are going to make more from a bag of doritos that they are selling you than they are the gas.&rdquo;</p><p>Mosher says the final factor for high gasoline prices can be pinned on the tax man.</p><p>&ldquo;First and foremost, we have to talk about the high taxes in Chicago,&rdquo; she said. &ldquo;About 70 cents on the gallon is what people pay in Chicago for gas taxes, really, really a high number, especially given the statewide average is 49 cents on the gallon.&rdquo;</p><p>Those figures can fluctuate, but that means generally 70 to 90 cents for every gallon of gas pumped in Chicago goes to taxes.</p><p>For example, if gas costs $4.67 a gallon that means 18 cents goes to the federal government; 43 cents for the state. And if you live in Chicago, tack on another 33 cents for Cook County and the city.</p><p>That includes sales and motor fuel taxes, the latter of which goes to pay for roads and bridges and some of the capital projects.</p><p>Although increasingly that money is being diverted to pay for things like pensions.</p><p>Another factor that hits wallets particularly hard is the way all levels of government in Illinois levy sales tax on gasoline purchases. The state of Illinois alone charges 6.25 percent sales tax. Twenty years ago when gas was much cheaper that meant just pennies on the dollar. But now that can be an extra 20 cents or more per gallon since the higher the gas price, the more taxes you pay.</p><p>&ldquo;Most states don&rsquo;t do that. Most states tax only based per unit, per gallon if you will. So, even if the cost goes up, the amount of tax you pay does not go up in terms of your overall cost,&rdquo; said John Tillman, Chief Executive Officer for the Illinois Policy Institute, based in downtown Chicago.</p><p>Last summer, the Institute called for the state sales tax to be changed so it&rsquo;s based on the number of gallons purchased, and not the price. The proposal fell on deaf ears in Springfield.</p><p>Still, if prices aren&rsquo;t coming down anytime soon, what are drivers supposed to do?</p><p>Well, for one thing, we can buy less gas.</p><p>&ldquo;We urge people not to wait for the government to do things but start consolidating your trips and take the L or the Metra train if that&rsquo;s a possibility to you,&rdquo; Mosher said. &ldquo;Do things on your own to start getting better gas mileage out of your car.&rdquo;</p><p>But even if you buy that fuel efficient hybrid or an electric car, drivers still might not be out of the woods when it comes to paying higher gas taxes.</p><p>Lawmakers in Springfield are talking about boosting motor fuel taxes to make up the lost revenue from fuel-efficient cars that use less gas. They may even impose fees on the fuel-efficient vehicles themselves to help fund road repairs.</p><p>One supporter of this proposal is Doug Whitley, president and CEO of the Illinois Chamber of Commerce.</p><p>Whitely is also co-chair of the <a href="http://tficillinois.org/" target="_blank">Transportation for Illinois Coalition</a> which has been in Springfield pushing an increase to Illinois&rsquo; motor fuel tax. Although with only one week remaining in the state&rsquo;s spring schedule, he says most lawmakers are focused on issues like pensions, conceal-carry and same-sex marriage.</p><p>&ldquo;The state&rsquo;s capital program to fund construction for roads, bridges and transit falls off the cliff next year. That fiscal cliff we heard about in Washington also exists in Springfield,&rdquo; Whitely told WBEZ this week.</p><p>Whitely explained that the state&rsquo;s fiscal program that started in 2009 will expire in the next fiscal year.&nbsp;</p><p>&ldquo;There&rsquo;s discussion of how to keep capital dollars flowing to the state and local government and the transit districts so they can continue to build, maintain and modernize and handle their construction needs,&rdquo; Whitely said.</p><p>Whitely said one proposal garnering a lot of attention is the idea of abolishing Illinois&rsquo; 19 cent motor fuel tax and establishing a new sales tax on fuels. A similar plan was just implemented in Virginia.</p><p>&ldquo;The motor fuel tax was last increased 23 years ago and there&rsquo;s no growth in that tax in large part because of the mile-advantages of today&rsquo;s more fuel efficient cars can take advantage of,&rdquo; Whitely said. &ldquo;We already have cars getting 50 miles to the gallon and electric cars, so the motor fuel tax isn&rsquo;t putting the money into the road fund to support construction.&rdquo;</p><p>Another idea is to levy new taxes or registration fees on hybrids and electric cars directly.</p><p>&ldquo;If you have an electric car, you&#39;re really getting away to use the roads but not having to pay much for them,&rdquo; Whitely said.</p><p>Whitely is sympathetic to Chicago area residents who already pay a lot of taxes on gas. &ldquo;But if you want to continue to have transportation systems that are modern, efficient, clean and safe, there&rsquo;s going to be a cost related to that,&rdquo; he said.</p><p>&ldquo;The bottom line is, there is no free lunch.&rdquo;</p><p dir="ltr" id="docs-internal-guid-393eb71c-d7eb-292a-bd1c-de35c9fd58e4"><em>Michael Puente is WBEZ&#39;s Northwest Indiana bureau reporter. Follow him on Twitter <a href="https://twitter.com/MikePuenteNews">@MikePuenteNews.</a></em></p></p> Fri, 24 May 2013 13:04:00 -0500 http://www.wbez.org/news/why-does-chicago-still-have-such-high-gas-prices-107356 Report: Home foreclosures push down local housing prices http://www.wbez.org/news/economy/report-home-foreclosures-push-down-local-housing-prices-102835 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/home_0.jpg" alt="" /><p><p>Distressed homes have pushed down housing prices in the Chicago area, according to a report released Tuesday by the real estate data and analytics firm CoreLogic.</p><p>Local home prices for August 2012, including homes facing foreclosure, fell 2.5 percent when compared to numbers from the previous year. The report also shows Illinois prices, including distressed home sales, declined 2.3 percent--the second-largest decrease in the United States.</p><p>&quot;The foreclosures and the short-sales have a major impact on our market,&quot; said Matt Silver, a director at the Chicago Association of Realtors. In a phone interview Monday, he said buyers are &quot;a little more cautious on the properties they do buy.&quot;</p><p>But Chicago realtors remained optimistic about the condition of the local housing market, saying that prices are expected to pick back up in the coming months.</p><p>&quot;Foreclosures need to be dealt with. But I think generally speaking, people are optimistic that they can buy a house today and in two years it will be worth similar to what it&rsquo;s worth today,&quot; said Chicago-based realty expert Jeff Lowe in a phone interview.</p><p>According to the CoreLogic report, excluding distressed homes, Chicago-area home prices in August have increased 1.5 percent since last year. Using the same measure, Illinois prices also rose 1.2 percent.</p><p>Meanwhile, home prices have risen nationwide. Including distressed properties, values increased 4.6 percent compared to August 2011. &nbsp; &nbsp;</p><p>&quot;Again this month prices rose on a year-over-year basis and our expectation is for that to continue in September based on our pending [...] forecast,&quot; said Mark Fleming, chief economist for CoreLogic, in a statement.</p><p>&quot;The housing markets gains are increasingly geographically diverse with only six states continuing to show declining prices.&quot;&nbsp;</p></p> Tue, 02 Oct 2012 13:48:00 -0500 http://www.wbez.org/news/economy/report-home-foreclosures-push-down-local-housing-prices-102835 Pricier PB&J's in the forecast, thanks to peanut shortage http://www.wbez.org/story/2011-09-28/pricier-pbjs-forecast-thanks-peanut-shortage-92604 <img typeof="foaf:Image" src="http://llnw.wbez.org//npr_story/photo/2011-September/2011-09-29/istock_000015590542large.jpg" alt="" /><p><p>How much you are willing to pay for your favorite sandwich? If it has peanut butter in it, you may soon be recalculating. A looming shortage of U.S. peanuts is causing the price of peanut butter to soar.</p><p>"We have quite a peanut shortage this year," says<em> </em>Tiffany Arthur, an agricultural economist at the U.S. Department of Agriculture's <a href="http://www.fsa.usda.gov/FSA/webapp?area=home&amp;subject=landing&amp;topic=landing">Farm Service Agency</a> — the folks who make emergency loans to farmers. "Things are snowballing and prices are sharply rising."</p><p>Peanut butter manufacturers have shelled out more money this year for peanuts, almost double what they paid last year. Arthur says this is the highest she's seen the price of peanuts. And it boils down to a couple of reasons: drought and the price of cotton.</p><p>Peanut broker Richard Barnhill says this has been one of the roughest years for peanut farmers. "Probably the first thing that happened was cotton prices were very high, which was very attractive to the farmers. So our first problem was [that] we didn't plant enough peanuts," Barnhill explains. Basically, he says, they swapped peanuts for cotton.<br> <br> "The second factor that happened was we have not gotten the rain," Barnhill explains. "We're in a La Nina [weather pattern]: hotter and drier in the Southeast and in the Southwest."</p><p>For this reason, many of the peanuts that farmers did manage to get in the ground did not survive the drought conditions. Some of those that survived were struck by crop diseases, making them unfit for food.<br> <br> The shortage won't just hit snack giants like Jif. Popular grocery chain Trader Joe's, which makes its own line of organic peanut butter, has discontinued it. When it does eventually hit shelves again, you'll pay about 70 cents more per jar, according to Trader Joe's Director of Public Relations Alison Mochizuki.</p><p>The shortage also comes at a tough time. Peanut butter consumption has jumped by 10 percent since 2008. Usually, it goes up just 1 or 2 percent in a regular year, says Arthur of the Agriculture Department.</p><p>Arthur says it has to do with the economy. "Typically you see peanut consumption increase during times of recession," she says.</p><p>That's because traditional protein sources like meat are more expensive, so some consumers are turning to a more shelf-stable high-protein meal.</p><p>Arthur and Barnhill say there's no need to panic, but be prepared to pay more. And consider this: In Georgia alone, the crop will be 30 percent smaller this year, according to <a href="http://www.cropsoil.uga.edu/personnel/faculty/beasley.html">John Beasley</a>, a peanut agronomist and extension specialist at the University of Georgia. That's potentially 3 billion fewer peanut butter sandwiches in American lunchboxes.</p><p>Parents like Jennifer Rice of Missouri might feel the pinch. Her sons sit on stools around an island in their kitchen after soccer practice, chanting "<a href="http://www.youtube.com/watch?v=s8MDNFaGfT4">peanut butter jelly time</a>" as they wait for their snack. Their father, Tom, opens a big jar of his favorite brand, Jif, which takes 540 peanuts to produce.</p><p>"Peanut butter to us means breakfast together on Saturday morning," Jennifer says.</p><p>But is a price increase enough to make Rice put peanut butter on her shopping blacklist?</p><p>"It's hard to put a price on what kids will eat," she says. "We probably wouldn't consider it if it were, like, $10 a jar, because that would be like buying caviar. I don't know: Even then we might consider it as long as the kids ate it."</p><p><em>Jessica Naudziunas reports from Missouri for Harvest Public Media, an agriculture-reporting project involving six NPR member stations in the Midwest. For more stories about farm and food, check out </em><a href="http://harvestpublicmedia.org/">harvestpublicmedia.org</a>.</p><div class="fullattribution">Copyright 2011 KBIA-FM. To see more, visit <a href="http://www.kbia.org">http://www.kbia.org</a>.<img src="http://metrics.npr.org/b/ss/nprapidev/5/1317315942?&amp;gn=Pricier+PB%26J%27s+In+The+Forecast%2C+Thanks+To+Peanut+Shortage&amp;ev=event2&amp;ch=139941248&amp;h1=crop+prices,peanut+butter,The+Salt,Food,Environment,U.S.,News&amp;c3=D%3Dgn&amp;v3=D%3Dgn&amp;c4=140873567&amp;c7=1053&amp;v7=D%3Dc7&amp;c18=1053&amp;v18=D%3Dc18&amp;c19=20110928&amp;v19=D%3Dc19&amp;c20=17&amp;v20=D%3Dc20&amp;c21=2&amp;v21=D%3Dc2&amp;c31=140893545,140893543,139941248&amp;v31=D%3Dc31&amp;c45=MDA0OTc2MjAwMDEyNjk0NDE4OTI2NmUwNQ001"></div></p> Wed, 28 Sep 2011 17:03:00 -0500 http://www.wbez.org/story/2011-09-28/pricier-pbjs-forecast-thanks-peanut-shortage-92604 Venture: A chicken butcher's price dilemma http://www.wbez.org/story/alliance-poultry-farms/venture-chicken-butchers-price-dilemma-84997 <img typeof="foaf:Image" src="http://llnw.wbez.org//story/photo/2011-April/2011-04-11/venture.jpg" alt="" /><p><p>For all of us who have bought milk or Corn Flakes lately, the most relevant economic news this week will likely be data on prices. Both the consumer price index and the producer price index come out this week.&nbsp;<br> <br> Consumers may be feeling sticker shock at the store, but it turns out that businesses feel it even more so when they go to stock their shelves. And deciding how much of that cost to pass on to customers requires some fine calculations.<br> <br> One chicken butcher in Chicago's Ukrainian Village is very familiar with that cost-price conundrum. Alliance Poultry Farms is tucked in among a jewelry store, a check-cashing place and a Walgreens on Chicago Avenue. Outside, it advertises "pollos vivos," reflecting its largely Spanish-speaking clientele.<br> <br> Alliance Poultry is a small business, but it’s just as tied to the global economy as any multinational corporation.<br> <br> Like most businesses these days, Alliance Poultry is dealing with higher costs. Co-owner Fayyad Abdallah says the price of cracked corn that he feeds to the birds has doubled in about a year and a half.<br> <br> But it's the price of gas that's really making his costs go up. Abdallah says he's now paying about 20 cents more a pound for the organic chickens he buys from Amish farms in Wisconsin, Michigan and Indiana. &nbsp;<br> <br> So in turn, Abdallah has to raise his own prices. But he's only increased his chicken price by 5 cents a pound.<br> <br> "We don't want to go up that much because right away, customers would notice that there's a big increase and then they'll be questioning, and then they might not come back again," Abdallah says. "So I'd rather lose a few cents a pound than lose a few customers."<br> <br> That calculation is something many businesses have to weigh.<br> <br> Chad Syverson is professor of economics at the University of Chicago Booth School of Business. He says producer prices, which are essentially wholesale prices, and consumer prices are correlated but don't move in lockstep. Producer prices have bigger swings up and down than consumer prices. He says it's something of a riddle why that is.<br> <br> One reason, Syverson says, is so-called "menu costs." The name comes from the cost restaurants bear when they actually have to print up new menus with new prices. But the idea translates to all businesses - there are costs involved in researching and setting new prices.<br> <br> Syverson says businesses decide to raise prices when they decide that their own higher costs aren't temporary.</p><p><img alt="" class="caption" height="437" src="http://llnw.wbez.org/story/insert-image/2011-April/2011-04-11/cpi v ppi smaller.JPG" title="Percentage changes in the consumer price index and the producer price index (University of Chicago/Chad Syverson)" width="638"><br> <br> We all know one area where higher costs seem to hit us right away - at the gas pump.<br> <br> That’s where we are this week for our Windy Indicator, getting a read on the wider economy from one little sliver.<br> <br> Are higher gas prices changing people’s buying habits?<br> <br> Yared Alemu manages a Shell station in Chicago’s Edgewater neighborhood.<br> <br> "Before, people filled up all the way," Alemu says. "Now they just give you 20 bucks, 30 bucks to fill up and that’s it."<br> <br> So are people driving less these days?<br> <br> Let us know how you're adjusting to higher gas prices - leave a comment at the end of this story.<br> <br> Next week, our Windy Indicator checks out the lamb shanks.<br> <br> <br> <br> &nbsp;</p></p> Mon, 11 Apr 2011 05:01:00 -0500 http://www.wbez.org/story/alliance-poultry-farms/venture-chicken-butchers-price-dilemma-84997