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Food for thought

Bruce Krasting's picture




 

The folks at the USDA released their projections for 2011/2012-food price inflation. The bad news is that feeding ourselves will cost ~4% more in 2011. The good news is that USDA thinks prices will rise only ~2.5% next year.

I shop (I hate it). My food inflation is closer to 10%. It depends on what you eat. For example, from the report:

 

Meats, poultry and fish +6%
Seafood +6.5%
Beef +9%
Fresh vegetables +5%
Cooking oils +7.5%

These items are all well above the average set by the USDA. The following kept the index low:

 

Processed vegetables +1.5%
Beverages +2%

After looking at this I loaded up on canned peas and Coke.

 

There’s other information at the site I thought was interesting. For example, what’s your guess on the amount spent for food prepared at home and the amount spent on eating out?

 

Answer: 52% is prepared at home, 48% is purchased and eaten onsite or taken home. Half of what we eat is “out”. I find that to be a surprisingly high number. Behind that 50-50 ratio is, no doubt, the problem with diabetes and obesity.

If you were wondering how the restaurant-bar business did during the depression the USDA has the numbers. My conclusion is that depressions are very bad for eating establishments. It takes a long time for a real recovery in spending habits. It’s also clear that wars are very good for the restaurant biz.

 

 

The “eat out” numbers did fall in 2009. But they recovered in 10’ and are headed higher again in 11’. We had recession. A big one. But consumers barely batted an eye. I’m surprised at this result.

 

 

The At Home and Away total 2010 food bill came to $1.2T. That makes eating the largest industry in America.

In 1930 19% of all food consumed was Produced at Home. By 1960 that percentage had fallen to 6%. In 2010 it was only 1.6%. While this trend is not surprising, the magnitude of the drop is worth noting. At one time we were a nation of gardeners, today we just do ‘drive through’.

The food we eat makes us sick. The 2010 estimate for food related illnesses came in at a lumpy 76,000,000 people (About ¼ of us get sick every year). These illnesses caused 325,000 hospitalizations and 5,000 deaths. The economic costs of these illnesses came to $152 billion. In other words, the bad food we eat cost us significantly more in 2010 than the combined operations in Iraq and Afghanistan.

It’s not surprising that the US pays less for food as a percentage of income than any other country. But the comparisons are still interesting. The US spends 6.5% of disposable income for food. Poorer countries like Nigeria, Kenya and Cameroon are forced to pay ~45% of incomes to put food on the table. The high population countries are as follows:

 

Vietnam = 38%
Indonesia = 32%
India = 28%
China = 22%

I find these numbers troubling. There is only one direction for them to go. The developing countries with big populations will see greater gains in income, with that will lead to increased food consumption. Approximately 30% of income goes to food in these areas.  It’s hard not to see that this is going to push up the prices the globe pays for everything we eat.

For example, the USDA put the per person food cost in China at $129 in 2000. Today that number is $360 (280% increase). Over the same period the USA consumption increased only 42%.

It’s old news that China and the other big/fast growing populations are consuming an ever-increasing amount of the world's supply. But these numbers are scary big. If the underlying trends continue (why would they not?) then we are headed into supply problems that can only mean rapidly rising prices.

This conclusion gets back to the beginning. Food inflation in America is running today at 5+%. The USDA says the inflation will moderate next year. This is more government hopium. I’ll take the “over” on their numbers. In my view rapid increases over the next decade are baked in the cake.

The most regressive economic consequence is for food inflation to take place. We have 45mm Americans on food stamps and tens of millions of others on the edge. I find it ironic that the Federal Reserve excludes food inflation when setting monetary policy. While the Fed can’t be blamed for rising food costs, they are most certainly stoking the fires.

Bernanke has said he wants to contain inflation (excluding food and energy) at less than 2%. Food inflation is running at double his target. Possibly Ben needs a new Mandate.

.

 

 

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Sat, 10/29/2011 - 17:03 | 1824905 buyingsterling
buyingsterling's picture

It's all about caloric output. Presently we're producing more than enough calories to feed almost everyone on the planet (lots of waste, lots of caloric recycling and loss through meat animals and ethanol). If there is mass starvation, it will be because we are incapable of continuing mass food production and distribution. No one has to starve. A sane and benevolent regime would be encouraging as much local food production as possible. This one is discouraging it. If I was cynical I'd assume they want us dead.

Sun, 10/30/2011 - 15:42 | 1826635 KickIce
KickIce's picture

My feeling is if the SHTF our problems will snowball.  People will scavenge nearby farmer's fields and those farmers will in turn either be unable or will refuse to plant a crop the following season.

Sun, 10/30/2011 - 00:44 | 1825729 Cathartes Aura
Cathartes Aura's picture

not dead (yet), but certainly in such poor health as to feed Big Pharma & the "medical" professions - when you truly spend time investigating these industries, you'll begin to see just how thoroughly the system consumes humans from cradle to grave.

Sat, 10/29/2011 - 16:13 | 1824770 Cathartes Aura
Cathartes Aura's picture

this "one acre" per person is a popular story - perhaps it depends on your growing methods and dietary choices - but there ARE many examples that might prove otherwise, including aquaponics, permaculture methods, etc.

an example of the MANY creative uses of "space" include Growing Power of Milwaukee, WI:

. . . a wonderful space for hands-on activities, large-scale demonstration projects, and for growing a myriad of plants, vegetables, and herbs.  In a space no larger than a small supermarket live some 20,000 plants and vegetables, thousands of fish, and a livestock inventory of chickens, goats, ducks, rabbits, and bees. 

http://www.growingpower.org/headquarters.htm

http://urbanhomestead.org/

there are many others, and neighbourhoods that dig up their useless, wasteful "lawns" and get busy with growing edibles, maybe keep a few chickens for their eggs & manure, urban beekeeping, etc. can go a long way towards keeping a majority of the food local - swap foods for variety, share knowledge, while we still can.

Sun, 10/30/2011 - 14:54 | 1826530 Kayman
Kayman's picture

Too true !

You can feed a family and then some with an acre of good land. 

Sun, 10/30/2011 - 12:39 | 1826280 LawsofPhysics
LawsofPhysics's picture

Sure, but again.  Do the MATH.  Are you saying a city with millions of people will be able to survive with a few hundred acres.  Again.  everything your say is true, BUT a city of even 10 million now requires a small state as a garden.  Fucking pods.  Believe what you want, but I doubt anyone here has actually survived for an entire year by eating food that they produced, without chemical fertilizers, chemical pest controls, or their OWN water source.  I have and yes some technology makes it easier, BUT again you need to pay an energetic price for the technology, period.

ZH attracts positive thinkers, that's great. There are 7 billion fucking pods on this rock and from what I can see, most are too studpid to even comprehend where their food comes from, much less feed themselves.  Hedge accordingly.

Sun, 10/30/2011 - 13:33 | 1826400 Cathartes Aura
Cathartes Aura's picture

I understand your points LoPh, and to some extent agree with you - the majority of peoples in amrka are ill equipped to support themselves, be it food or otherwise.  and many of those will resist even trying to learn.

those who have already begun to re-think their "reality" are people I find of interest to share ideas with - those who are resolute, defending their current status, etc., will experience what they have created, what they "believe" in.   as always, each person's life brings different outcomes.

at this point in time, I want to support local initiatives that strengthen folk around us - rather than perhaps hunkering down & defending what we each have, which of course may need to happen, I think there are benefits in sharing self-sufficiency ideas locally.  everywhere I go, there are always a few who are ready, eager for change(s).

can't save the "7 billion" - but might assist 7 locals!

Sat, 10/29/2011 - 22:09 | 1825518 Arkadaba
Arkadaba's picture

Have been seeing many more news articles on urban agriculture recently. And why spend money on fertilizers to keep your lawn green when you could grow something there? I think it is a no brainer but does require a shift in thinking that hasn't happened yet. But as someone who lives in a condo with a small balconey and very little light - mea culpa.

Sun, 10/30/2011 - 00:41 | 1825722 Cathartes Aura
Cathartes Aura's picture

look into container gardening, it's amazing how much can be grown in smaller spaces - trellis beans, etc. - if nothing else, you begin to learn how things grow & thrive. . . also, look into community garden allotments - if you don't have any locally, agitate to use "vacant" lots, etc. - most areas have waiting lists to get a plot, and it's another important resource going forward.

Sun, 10/30/2011 - 12:25 | 1826256 americanspirit
americanspirit's picture

Also look into growing very high value crops in a small space that can be traded for more basic crops that require a lot of land.

Sun, 10/30/2011 - 12:25 | 1826255 americanspirit
americanspirit's picture

Also look into growing very high value crops in a small space that can be traded for more basic crops that require a lot of land.

Sun, 10/30/2011 - 13:41 | 1826421 Cathartes Aura
Cathartes Aura's picture

excellent point americanspirit - tobacco being a prime example, and your website / book are important resources.

I'm drawn to the medicinal herbs, making tinctures, etc. - it's something I've always been interested in, but did too much travelling around in the past to get a serious garden going until recently.  people on Big Pharma white drugs may be up shit creek going forward, be nice to offer alternatives to those willing to make the shift. . .

Sun, 10/30/2011 - 01:54 | 1825824 Arkadaba
Arkadaba's picture

Thanks! I'll check it out.

Sat, 10/29/2011 - 12:18 | 1824278 Jena
Jena's picture

52%/48%!  This doesn't seem logical on either a health or cost basis:  You can control what you put in your food when you cook it at home but you have almost none when you don't.  

Thanks, Bruce.

Sun, 10/30/2011 - 12:06 | 1826227 my puppy for prez
my puppy for prez's picture

But the ground up bugs and rat poop from the factory food makes everything soooooo delicious!

Sat, 10/29/2011 - 15:33 | 1824673 TheMerryPrankster
TheMerryPrankster's picture

And it is always cooked just the way you like it and its always has the side dishes you enjoy. Cooking gives you power over your own life and brings the joy of creation and creativity.

I cannot understand how people can eat out so much, it is like being in a wheelchair when your legs are healthy and you could walk.

 

Sat, 10/29/2011 - 16:34 | 1824836 margaris
margaris's picture

+1

what a wonderful proverb

Sat, 10/29/2011 - 14:02 | 1824487 Talleyrand
Talleyrand's picture

Doesn't really matter where it is prepared...most of the 'food' consumed in the US is just agro-industrial waste anyway.

Sat, 10/29/2011 - 12:13 | 1824269 Hannibal
Hannibal's picture

WTF: Soylent Green(biscuits)for the 99%?

Sat, 10/29/2011 - 13:35 | 1824445 Narcolepzzzzzz
Sat, 10/29/2011 - 13:53 | 1824468 Cathartes Aura
Cathartes Aura's picture

 Kindle Fire . . . through the looking-glass, eh.

 

Farenheit 451

Sun, 10/30/2011 - 05:35 | 1825931 Carlyle Groupie
Carlyle Groupie's picture

Kindle homos. Real men buy books, have libraries, love the smell of hard bound paper in the morning.

Sun, 10/30/2011 - 05:35 | 1825929 Carlyle Groupie
Carlyle Groupie's picture

Kindle homos. Real men buy books, have libraries, love the smell of hard bound paper in the morning.

Sat, 10/29/2011 - 12:46 | 1824333 the grateful un...
the grateful unemployed's picture

soylent green biscuits ARE the 99%

Sat, 10/29/2011 - 12:25 | 1824285 malikai
malikai's picture

Soylent orange is my favourite. 

Sat, 10/29/2011 - 16:11 | 1824758 TheMerryPrankster
TheMerryPrankster's picture

Solyent Lite, has less sugar and fat, but its sooo good, I always wind up eating more than I should.

Sat, 10/29/2011 - 17:04 | 1824906 mkkby
mkkby's picture

Watch out for the scoops.

Sat, 10/29/2011 - 12:13 | 1824265 Mr.Kowalski
Mr.Kowalski's picture

Enjoy these low prices while you can.

"Approximately 40% of the world's agricultural land is seriously degraded. According to the UN, an area of fertile soil the size of the Ukraine is lost each year due to deforestation, drought, city expansion, desertification, salination and overuse. In Africa, if trends continue, the continent might be able to feed only 25% of it's ever growing population by the year 2025.. a scant 13 years from now"

http://themeanoldinvestor.blogspot.com/2011/10/megatrends.html


Sun, 10/30/2011 - 12:04 | 1826222 my puppy for prez
my puppy for prez's picture

Strange they didn't mention GMO and synthetic/toxic pesticides and fertilizers....very fishy!

Permaculture is "where it's at"!

Sat, 10/29/2011 - 16:57 | 1824893 css1971
css1971's picture

And on the brighter side:

http://en.wikipedia.org/wiki/Terra_preta

Sat, 10/29/2011 - 21:35 | 1824890 buyingsterling
buyingsterling's picture

But I call BS. Ukraine is more than 4x the size of the entire state of Iowa. If we're losing that much 'arable' land, it's not being worked productively now, or we'd already be starving.

Africa may only be able to feed 25% of its population by 2025? That's the globalist plan. That figure assumes that people are as constrained by regulation and bureaucracy as they are today. If so, millions of dead Africans will be only one of our problems.

Sat, 10/29/2011 - 12:11 | 1824264 Bolweevil
Bolweevil's picture

Does growing your own food put you on a no fly/domestic terrorist list? What about chickens?

Sun, 10/30/2011 - 12:02 | 1826219 my puppy for prez
my puppy for prez's picture

No, but they will make sure and negate any health you have obtained through growing your own by microwaving you at airport security lines.

Trust me...it's only a matter of time.  I follow this stuff on a daily basis.  

Screw the FDA-USDA-DHS!!!

Sun, 10/30/2011 - 07:28 | 1825976 swamp
swamp's picture

#OWS Occupy DHS and TSA too !!!

Sat, 10/29/2011 - 16:12 | 1824762 TheMerryPrankster
TheMerryPrankster's picture

Chickens can't really fly, no need for a list.

Sun, 10/30/2011 - 17:05 | 1826759 minosgal
minosgal's picture

Not for nothing, but they can. They prefer not to fly appreciable distances, but can definitely rise above height limits of backyard fences.

Full disclosure: Long on grandfathered-in Cuban acquintences in Key West, Miami and Tampa. Yeah, hens can fly, and cocks really have the uber-dick attitude (Ya have to just kick them, when they get that way).

Sat, 10/29/2011 - 13:00 | 1824363 dwdollar
dwdollar's picture

Not yet. Only if you try to sell or exchange it with someone else do you have to worry about that.

Sat, 10/29/2011 - 13:49 | 1824464 DumFarmer
DumFarmer's picture

A recent lower court ruling in Wisconsin stated, amongst other things, you have no individual right to produce whatever food you wish to consume nor own a cow for personal cunsumption of the milk. I shit you not.

They can have my brussel sprouts when they pry them from my cold dead hand ;)

Sat, 10/29/2011 - 20:37 | 1825388 Pool Shark
Pool Shark's picture

 

 

It's been that way since the 1930's.

See Wickard v. Filburn: the case that killed federalism...

Sat, 10/29/2011 - 17:26 | 1824975 Uncle Remus
Uncle Remus's picture

Ah, the Peoples Republic of Wisconsin. Didn't that butt-plug of a judge recently go to work for Big Ag?

Sat, 10/29/2011 - 19:59 | 1825318 Coast Watcher
Coast Watcher's picture

Yep, a law firm that does work for Monsanto.

Sat, 10/29/2011 - 12:08 | 1824253 pupton
pupton's picture

I would love to be able to "eat out" with the Mrs. more often...

Sat, 10/29/2011 - 12:06 | 1824247 Sequitur
Sequitur's picture

Bruce: if you have local farmer's markets in your area, go to them. I promise you the produce is far, far superior to anything you'll get at a supermarket, including overhyped places like Henry and WholeFoods. Plus the prices can be reasonable. I'd say 90% of our fresh food shopping is done at local farmer markets and farms. Supermarkets are shit. If you haven't tried it, trust me on this one.

Sun, 10/30/2011 - 11:59 | 1826212 my puppy for prez
my puppy for prez's picture

AMEN!!!

Also, support local dairy farmers and buy (if legal) their "raw" clean milk.  It is actually good for you!

Don't believe me, doubters?  Do babies drink cooked breastmilk?   Case closed!

Sat, 10/29/2011 - 15:10 | 1824627 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

thats the beauty of living here in france, I don't have to spend anything in supermarkets

Sat, 10/29/2011 - 12:58 | 1824361 Reese Bobby
Reese Bobby's picture

Shut up and drink your fluoride!

Sat, 10/29/2011 - 12:03 | 1824240 etresoi
etresoi's picture

Bruce, correct me if I am wrong but I thought you were Swiss.  When you write "we," I do not think you mean me, your fellow Swiss.  

Sat, 10/29/2011 - 12:30 | 1824296 Bruce Krasting
Bruce Krasting's picture

I am Swiss. I have a Swiss passport. I live in the USA. Always have. I'm a US citizen as well.

I eat Swiss Cheese, American cheese too.

Sun, 10/30/2011 - 01:03 | 1825743 sitenine
sitenine's picture

Bruce, American cheese is shit.

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