No Inflation? General Mills Begs to Differ

CrownThomas's picture

Repeatedly, all we hear is that Zero Hedge is just some wing nut website. Always stretching the truth about the economy's woes, and constantly claiming hyperinflation is just around the corner. Ya, about that...

General Mills came out Wednesday with their Q3 earnings, and what do you suppose was one of the top points they wanted to make to their investors? Just that they were experiencing significantly higher input costs year-over-year.

As a matter of fact, they say that YOY inflation input costs were actually higher by 2% 3% 5% 8% ...


So is it deflationary for the consumer if the 3rd biggest food company in America is experiencing double digit inflation?

But then again what do I know, I'm just a contributor to a blog. And I don't even have a Phd.




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q99x2's picture

Phd is not important. You must have an Ipad.

I am Jobe's picture

No Food OK, No Education Ok, Must have IPAD at all cost. All Hail Foxconn and the sheeples who are wanting the latest device to ensure they are connected to people they don;t know and say look at me, and what I have got til the next model comes along, the the cycle of broke continues.

When does one stop to think ...O yes never in the USSA. Why , it hurts to think, rather stuff ones face , look cool and watch football all day at the water cooler and watch tv after work and have a kindle to show I read .


Walt D.'s picture

So bread is more expensive?

Let them eat cake!

Wait a minute - cake is more expensive.

Let them eat cornflakes.

Cornflakes are more expensive.

Make the box smaller -(actually put less cornflakes in the box - keep the box size the same.)

Oh - hears the solution - buy a new IPad with a retina display for the same price as last years model.

BTW don't fill up with gas on the way to Walmart - we wouldn't want to confuse you.

Go to the Dollar Store - everything is a dollar - no inflation here. (Hint, you grocery bag is getting lighter and lighter.)

I am Jobe's picture

The old Model of Guns vs Butter is over, the New Model is IPAD vs Food prevails. Sheeples too stupid to undertand or know how to cook. Look at the fucking frozen food aisle, scary.


I am Jobe's picture

Summation of all forces = ZERO. Lesson 101, Statics. Apply it to life . Relates well.

Nukular Freedum's picture

Tell me about it fella, I wrote the book on it. Might be a bit much for you to read though.

I am Jobe's picture

Really, go ahead throw me some equations. Of course, I always looked down on Grease Monkey's, er I mean Mechanical Engineers.

I am Jobe's picture

No shit Sherlock. Really, wow.

Someone call the Federal reserve , Janet Yelln the Whore and the BenDonkey the Blow Job giver and tell them that.

AmazingLarry's picture

Long HFCS. 'Round here it's transpored via 35,000 gallon tanker cars. Wish I had a video of how man cars in a row there are sometimes that roll right by my house going from the ADM and Cargill processing plants out west to the various GM plants where they make cereal and other associated garbage. It's quite a sight to see; depressing, but hey the sheep gotta eat!





Solarman's picture

So worldwide money printing is no factor?

RobertBrusca's picture

It may become so but not yet...

Don't give up on it.

The Fed could still make the BIG MISTAKE

Until loan growth picks up in the US the excess reserves in the banking system are really not monetized.

US money growth has just picked up but velocity has tanked .

still plenty to worry about.

riphowardkatz's picture

It just picked up? Month over month growth has exceeded 10% for 36 months in a row. I guess just picked up relative to a 100 year time span. 

The Fed could make the BIG Mistake? Don't know what you are talking about but I would think doubling the total dollars in 10 years probably is the BIG mistake. 

I am not sure velocity is even a valid concept but if you mean people start getting terrified that their store of value has been cut in half and want out of the dollar pronto that is not an IF but a when. To some extent housing, copper, corn, gold, silver, almost all commodities say it is already happening. Maybe the first inning but the game has started. 


tradewithdave's picture

The irony in this is that a key input for nitrogen-based fertilizers (HaberBosch cycle) is natural gas.  Oh, to be a Koch brother.

Winston Churchill's picture

The inflation genie is getting too big to contain in the bottle much longer..

Smaller product measures and other sleight of hand tricks can only fool

the sheeple for a little while.Next will be the wage push side of the equation.

bugs_'s picture

good find!   surprised they put a number on it.

jmcadg's picture

The really shrewd (read greedy) reduce the size 10% and hike the price 10%. Job's a goodun' Big bonuses all round.
Do you know what, people don't forget.

mikemcsaudi's picture

Dear Bobby,

You said...

With enough productivity (output per worker) you can take rising input prices (which are a fraction of most-MOST not all- final output product costs) and grind them down to a small impact.

You are obviously a pinheaded economics teacher and have never ran anything in your life except your mouth. The point that General Mills is making is that their REAL costs are up 10%. Of course you can cut costs by making process improvements or outsourcing your workers to West Jabip, but at the end of the day it is costing them 10% more to buy the products to make a box of Cheerios.

Guess what? If inflation wasn't occurring they would have made MORE MONEY. Capitalism at it's best. But because of INFLATION they did not.

Go back to reading your economics books written by your Commie friends and be ready to pay more for your protein drinks and bacon sandwiches at your local Bistro. If their prices go up tell THEM to get their workers to be more productive!

RobertBrusca's picture

Actually if you read the items that pertains to all this you will find that the company said it was squeezing margins, that means profitability was suffering because the price increase was not being passed through.

Sorry I'm such an idiot and don't understand anything but I do understand what I have read at least better than you (low hurdle).

and yes I do teach economics both micro and macro. and unlike you I do understand it.

bacon is good but not a bacon sandwich too many carbs.

?? I wonder how I suddenly became a Commie?

really nice rant. illogical; all over the map. I'm sure those who you know you by your tag are impressed by what you have written here.

There is pressure on commodities more because of the growth and development of China and India and others than because of the Fed. There will be continuing increases in real food and energy prices- get used to it. Commie or not here they come.

mikemcsaudi's picture

Robert (I'll try to be kind this time around),

I don't know you from Adam, but just by reading your initial comment I could tell that you were a teacher of economics and not steeped in the actual application of running a company. The harsh reality, which you have highlighted, is that inflation is on the rise. India and China are causing some prices to rise, but not all. Base commodities are going up everywhere. The cause is the devaluation of the US DOLLAR. All theories aside, when you are 15+ trillion in debt and your answer is to continue to debase the dollar to prop up banks that should fail because they are ran by horrible businessmen who don't care about risk, then your currency will devalue and prices will rise. The FED is destroying our country. Eventually there is going to have to be a reset in our monetary system because the dollar will fail as nations and people loose faith in a worthless currency. Your pension will be zippo ... As will mine. The ONLY question now is WHEN, not if, it will happen.

I'd probably only get a "C" or "D" in your class, but I WILL be better off than you with some common sense, gold, guns and a getaway plan. Gold to protect myself from a falling dollar. Guns to protect myself from social disorder when the average person is spending 60%+ of their income just on food, and a getaway plan to a safer location than a major metropolitan region of the US.

Hope NONE of it happens, but that hope is diminishing every time the FED "rescues" our economy.

FrankDrakman's picture

Mike writes:

Guess what? If inflation wasn't occurring they would have made MORE MONEY. Capitalism at it's best. But because of INFLATION they did not.

Then you wrote;

Actually if you read the items that pertains to all this you will find that the company said it was squeezing margins, that means profitability was suffering because the price increase was not being passed through.

And THEN you get all uppity and huffy about it:

I do understand what I have read at least better than you (low hurdle).

I only have a master's degree and no Nobel Prize, but I have written professionally for many years, and the two comments on GenMill pricing are syntactically identical, except Mike omits your repetition of GenMill's inability/reluctance to raise retail prices.

In fact, I'd say Mike's post gives greater credit to the education level of readers here, since he assumes ("Capitalism at it's best") we understand, for example, that in a (nominally) free market system, for products that are nearly fungible (can anyone tell a bowl of Cheerios from generic "Oat O's" once the cereal is in the bowl?), producers have to be price takers, instead of spelling out basic economic theory, as is the wont of various pedants extant. Not that I'm naming any names, Bob. (BTW, Mike, please learn the difference between its/it's; it takes about 2 minutes.)

So I'm going to gently suggest that your view of your greater economic understanding vis-a-vis Mike is, at the least, inflated, and based on various posts I've read, non-existent. And I prefer Mike's concise style to bloviating posts whose authors are unacquainted with Twain's dictum "Never use a $5 word when a $0.50 one will do.".

mikemcsaudi's picture


Typing on an iPad makes it a pain to use contractions and to correctly use the king's English. My apologies to the English majors on ZH and to you. It's difficult! ;)

Nothing against Robert, but economic theories have little value when you can walk to your grocery store and see what inflation really looks like. Especially when your theory contradicts common sense. I love educators, but my pet peeve with them has always been their loss of reality on what is truly going on. That, and their arrogance that they think that they are so smarter than the average individual. Ok, I'm no rocket scientist, but at least I recognize it and I'm not ashamed. I know I make much more than Robert (isn't capitalism great!) and I'm not afraid to be wrong ... And I can laugh at myself. Most importantly though, I have great common sense. The dollar is headed to hell in a handbasket and I'm doing everything I can to protect myself from that crash.

Renfield's picture

"The problem is to teach ourselves to think, and the writing will take care of itself." (Christopher Morley)

To me, a sure sign of flimflam is a convoluted, opaque writing/speaking style. (Hi there, Alan Greenspan.)

It's not often I get to see a comment that's concise, uncluttered with ad hominem AND gives gratuitous Twain!

bushwarcrime's picture

I think some college prof gave his class an assignment called " reply to Zero Hedge" and this is the result.  Welcome class of 2016.  Please use your passport at your earliest convenience.

Solarman's picture

So worldwide money printing is no factor?

BudFox2012's picture

Actually prices have been going up like this since 2008.  The first few years they hid it by slashing costs internally and reducing packaging costs.  Then they reduced inventory.  Then they started reduced labor and increased lead times.   Then they reduced quanities of products.  Now in the last year prices have skyrocketed on top of all the other cuts because there is nothing left to cut, and sheeple are finally "getting" it.

SanOvaBeach's picture

"reduced quanities of products".  Thats for sure, thats for dang sure.  Take note next time you go food shopping.  Packages of food items have been reduced by oz. or lbs. depending on the item.  Packages look the same and price is the same.  Who said, "life is a stage"?  Was that Will!....................

DaveyJones's picture

BudFox - there was one last thing they hid - the crooks

life's a stage - shakespeare

exit, stage right - snagglepuss

lakecity55's picture

"Hello. Jay "Carnie" Carney here. Overlord Obamatron want you to know websites like ZH have NO useful information. They are a front for Ron Paul, the old crazy guy who thinks there is something wrong at our wonderful Fed."



azzhatter's picture

Breaking News- General Mills declared a terrorist organization


We will not have dissent- there is no inflation

OneLessZombie's picture

stop buying their crap

maybe the message will trickle up

tgatliff's picture

In other News - "TSA requests a 50% budget increase to deal with this new terrorist threat" 

lakecity55's picture

FLASH! General Mills HQ hit by Hellfire Missile!

RobertBrusca's picture

I know how really stupid it is to try to write something serious here but....

Raw materials are INPUT prices inflation is about prices at the consumer level after inputs are entered and all processing is done and goods are delivered to stores for sale to the public.

With enough productivity (output per worker) you can take rising input prices (which are a fraction of most-MOST not all- final output product costs) and grind them down to a small impact.

The Fed has new 'policy manifesto.' It was released on Jan 25th it is at this link:

I have written about it. The 'new' policy statement is nearly TWO months old. No wonder you do not know about it. You are too busy being snarky and insulting about what I write to read and absorb WHAT I write (and what others write) or to even engage in a pointed but civil disagreement.

In this statement the Fed notes it is now focusing on overall PCE (personal consumption expenditures) inflation, not core (ex food and energy).

So you should be happy that the Fed is 'wit chew'.

right now the PCE is up by 2.4% Yr/Yr (the core, if you care, is up by 1.9%).

Since Bernanke as been Chairman (six years) headline PCE inflation has averaged 2.1% and the core 1.9%.

And yes I know you don't like this measure and it does not reflect what you pay and every economist is an idiot.

Still the index is a weighted average of prices spent on goods purchased. housing costs are big part of any consumer-type or PCE price index and with house prices falling and interest rates low housing is CHEAP- yes I know rental rates are rising. But most people live in houses and unlike most of you, most do not throw stones.

So I am not surprised about cereal prices. And if you knew about nutrition you'd not care, as you would not eat that stuff anyway. Protein is much better for you. It's carbs that spike your blood sugar and are apt to give you diabetes.

But then you are all so smart you either know that or think I am a fool for believing it. Because snarky knows best!

Economics is based on a balanced view of the economy (hey Gotcha there balanced comments are really lacking here). I know how fun it is to take a few items and blow the CPI or PCE out of the water with that thin gruel of wisdom. But then you could always try to say something more insightful. That is less fun and it is more work and in the end it would expose you and your thinking (if you did any) to the criticism of others). So let's not be judgmental. Let's just spew trash! Everyone will see it for what it is and no one will take it seriously; lots of value-added there...

You will probably win. I will probably get tired of trying to make actual economic points for people who DGAS. And maybe you will like that. Maybe this is your recreation while it is something others take as serious. Someday you may recognize what you have ruined. When serious people stop posting you will only have snarky comments and its not much fund to snark a snarker is it?

It would be more interesting if some of you actually came out of confidentiality closet and associated your real name with the disgusting things you say. I can see some need for opacity on the site to encourage discourse on some issues but when you are just hurling you should fess up to your own limited IQ or predilection for garbage.

I'd like to see a feature in which comments could be tagged for destructive nature and given enough votes against the comment the source's real email/name would be revealed.

That would be great FUN would it not?

Every process needs some policing; done either by an outsider or by its own membership. In my view this is way out of line. But then I'm not 15 Years old any more. And that is the level of most commentary. Just peruse it yourself. If there is such a web site, cut and paste the commentary, drop it in a text box and evaluate it for its grade equivalent level. I'd say the fifth grade could cover most of it, unless the program would not recognize such widespread use of swear words and insults with someone so young.

I urge you to turn the site into something more useful not less useful.

Yours truly,


CrownThomas's picture

Prof, if you read the second sentence in the first paragraph you'll see your consumer impact starting to take place.

malek's picture

Oh, so because of the new 'policy manifesto', now

1.) everything going forward will be great and
2.) all previous problems or errors are ignored and forgiven?

I am also waiting for your argument based refusal of John Williams Shadow Stats numbers.
Based on verifiable and reviewable sources, crosschecked against long term real life practical experiences, not just "the Fed said" or "academician X stated." And no need to digress into philosophy (or protein vs. carbs) there, just the facts please.

I would actually prefer a user filter for me, which would show their comments to me in closed form first, but on click could be individually opened. Very high scoring ones might appear open right away, still.
But I understand the strain on the blog servers would be too high, given the huge number of users I and most other readers here would put in their individual filter lists.

mophead's picture

"With enough productivity (output per worker) you can take rising input prices (which are a fraction of most-MOST not all- final output product costs) and grind them down to a small impact."

My background is food production. You don't know what you're talking about. Just because input costs are a fraction (something less than a whole) doesn't mean it won't hurt the bottom line or that you simply can increase efficiency without limits. FYI, our company has been absorbing higher input costs for the last couple of years and we are down millions in profit. We can't raise prices enough because our main customers (which are among the largest retailers in the nation, and in the world), won't let us!

drchris's picture

Hi Bob.  Thanks for your thoughtful post.  Understand that many here are frustrated with the current state of things.  Some come here purely for a cathartic release.  However, there are some that don't mind listening to other view points and debating topics.  Usually I just get a good laugh reading through the comments here, but sometimes I learn something.  

For instance, I didn't realize the fed was focusing on overall PCE now.  That is obviously an improvement.  However, if we're trying to model personal expenditures (and I admit to not knowing the details of how this is measured) then falling home prices should be largely ignored.  I would imagine that for the vast majority of home owners, their mortgage payments have remained the same, but they now pay more for food and fuel.  Their falling home value does not save them any money, but only means they are stuck in their home for the foreseeable future.  In this sense, the article does make a valid point about something that we all need to pay for on a daily basis: food.  And while I agree that cold cereal is not a great source of protein, General Mills sells lots of other things too.  You may be interested in their low-fat yogurt.  

Anyway, please don't be discouraged to post here.  There are a some of us that appreciate differing opinions. 

John Law Lives's picture

"Still the index is a weighted average of prices spent on goods purchased. housing costs are big part of any consumer-type or PCE price index and with house prices falling and interest rates low housing is CHEAP- yes I know rental rates are rising. But most people live in houses and unlike most of you, most do not throw stones." - Bob

Correct me if I am wrong, but are you touting the weakness in housing prices as a GOOD thing? Do you seriously believe Bernanke WANTS housing prices to remain depressed?

RobertBrusca's picture

do not mistake objective analysis for approval. We have had a housing boom and bust with alternate boosting then cutting of rental equivalent costs.

We are still in the 'bust' phase. that's all

rwe2late's picture

The allegedly “objective” and academically acceptable economic ideology primarily operates to dazzle us all with micro level obfuscation.

The core level inflation rate is “expedient” because the “headline” rate is hard to measure, Bernanke & co. are good guys … blah, blah, blah.

Yes, the core rate conveniently ignores the impact of higher “headline” costs on especially the lower classes. Yes, the way in which “inflation” is calculated conveniently allows an overstatement of GDP “growth” and an understatement of wage stagnation. Yes, by focusing on the “domestic” economy, the global effects of exporting inflation can be dismissed. So what if some foreign peasant can’t afford to eat, so long as corn ethanol helps keep our gas prices down. No matter the upward wealth transfer, the financial handouts, the warfare economy, the drug prohibition/prison industry, the client sheikhdoms, the apartheid partner. It’s all just numbers, devoid of context. “production” is production, no matter what it must be good for ourselves and the planet. Anyhow we don‘t need to pay too much attention to the “macro” stuff. Isn’t all the economic activity being guided by an “invisible hand”, all for our own good?

But we are assured, none of this academically proper focus is intended to divert, it’s all just an effort to be objective, factual. Any defense of the status quo must be purely a coincidence.

( A coincidence based on confining analysis within parameters of the established order. No different than confining “political” analysis to what is "relevant" within the Democrat/Republican spectrum).

Widowmaker's picture

I can think of 787 billion reasons that your premise is shit, Bob.

Who needs logic or economic balance when fraud and financial racketeering ARE the markets?

Identity has nothing to do with lawlessness and bullshit accounting behind inflation and the lack of price discovery.

The fact you rationalize injustice and corruption makes you the fool.

Bitching about ZH losers only proves it.

RobertBrusca's picture

In some sense you are right in that fraud does impede economic efficiency.

I don't know who you blame for it. The guys who do it, or the Fed's who don't find it or the people who are duped by it.

The answer is to ferret out cheats and fraud not to suspend the use of logic and rational analysis.

you lost me when you said I rationalize injustice and corruption.

I really did not mean to do that. I don't know how liking a core inflation target puts me there. But I'm sure with enough drug use I could figure it out.

In any even it gave you an excuse to call me 'a fool' and I'm sure you feel better for that. And well, right you are, here I am answering the post of another ZH loser-YOU.

Nice job ...widowmaker? classy moniker dude!

rwe2late's picture

I don't know who you blame for it. The guys who do it, or the Fed's who don't find it or the people who are duped by it.

 A fine summary of your "objective" philosophy.

Let me restate it:

I don't know who you blame for it. The guys who do it, or the cops bribed to look the other way, or the people who are robbed.


( Wasn’t the "science" of “economics“ originally called “political economy“? )

tgatliff's picture

Yes, so what you are saying is that those increased "productivity" gains (aka The cereal is now 50% ground up sweetened card board and 50% air) actually makes the product better?   Wow... Keep smokin that Keynesian tea leaves Bob... You are going to need them moving forward..


RobertBrusca's picture

I know my post was long and trying but did I say anything about ground up cardboard or that that was good? (it might i fact be better, healthier to eat pure fiber than sugar coated grains!) But I bet you missed my reference to protein, too?

Seems to me that talk of eating cardboard is all YOUR invention and YOUR idea.

But I guess you thought it sounded so stupid you'd attribute it to ME.

aren't you the clever one?


lakecity55's picture

Dear Bob,

Create your own blog and post your own comments on it.


RobertBrusca's picture


I think you miss the point.
Are your really sticking up for what goes on here?