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agb101TERMPAPER - The purpose of this term paper is to...

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The purpose of this term paper is to provide some possible justification for the price fluctuations that I observed in my data from the Albertson’s located in Morro Bay. Between my first price recording on January 6 th and my recent recording on the 21 st of February, sixteen out of the fifty products I recorded changed in price. The poultry and meat products stayed relatively close to their original prices, with the exception of four price changes. The dairy products all remained the same except for all varieties of milk. All prices for cereals remained strong with only one change. The produce department had the most fluctuation in price out of all categories with six total changes. In the following, I will attempt to explain why some of the significant price changes occurred, and also why some stayed the same. The price for Foster Farms boneless and skinless breast fillets went from $4.99 to $5.99 which represents a 20% increase. A minor reduction in supply might explain the rise in cost. Foster Farms processing plants need to have federal inspectors on hand in order to keep their USDA certifications. With the possible spread of Salmonella and other pathogens in the plant, the Food Safety Inspection Service notified the Kelso plant that it would not perform any inspection until the company improved its plans to prevent the contamination of their product. (Forgey, 2005, para. 2&3) Although the plant was operational within a few days, this minor setback could have effected their production and supply. The price of Moran’s ground beef changed from $3.99 to $4.99 which is a 25% total increase. Bovine spongiform encephalopathy, or “Mad Cow Disease,” is the degenerative neurological disease of cattle that is transmitted by consuming contaminated meat or bone meal. (www.avma.org/ 2005, para. 1&2) This disease is still in issue that is highly regarded by the USDA and Food Products Association today. The Food and
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Drug Administration and USDA have focused on preventing BSE in U.S. cattle by banning the use of ruminant products in cattle feed, along with specified risk materials, and downer cattle in the production of food for the marketplace. ( www.nfpa-food.org/ 2005, para. 3) These actions may be costing cattle producers more money in order to achieve the new regulations, so they might be compelled to sell at higher prices.
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