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November Producer Prices Decline For Third Consecutive Month, Rising Pork Offset By Falling Chicken Prices

Tyler Durden's picture





 

In the aftermath of a series of "better than expected", and thus "taper on" economic data, there is just one wildcard remaining for the Fed: inflation, or rather the lack thereof. And while next week's CPI report will be very closely watched in this regard, producer prices also provide a glimpse into pricing pressures and resource slack. And judging by the just announced -0.1% drop in finished goods producer prices in the month of November, below the 0.0% expected if up from last month's -0.2%, which happens to be the third consecutive decline in overall PPI, a first in the past year, the Fed's December taper decision just got even more complicated. Looking into the components, core PPI rose by the tiniest possible fraction, or 0.1%, in line with expectations, while it was energy prices that dipped 0.4%, pulling the overall number lower with the BLS noting that home heating oil's 5.7% decline was among the key culprits for the drop. Food producer prices were unchanged for the month, with higher prices for pork offset by lower prices for processed young chickens.

At the earlier stages of processing, prices received by manufacturers of intermediate goods declined 0.5 percent, and the crude goods index fell 2.6 percent

Monthly breakdown by component:

Broken down by processing stage:

Finished goods

In November, the decrease in the finished goods index can be traced to a 0.4-percent decline in prices for finished energy goods. By contrast, prices for finished goods less foods and energy advanced 0.1 percent. The index for finished consumer foods was unchanged.

Finished energy: The index for finished energy goods declined 0.4 percent in November after falling 1.5 percent in October. Nearly three-quarters of the November decrease is attributable to gasoline prices, which moved down 0.7 percent. Lower prices for diesel fuel and home heating oil also were factors in the decline in the index for finished energy goods. (See table 2.)

Finished core: The index for finished goods less foods and energy inched up 0.1 percent in November, the third consecutive advance. Leading the November rise, prices for light motor trucks increased 0.6 percent. Higher prices for agricultural machinery and equipment also contributed to the advance in the finished core index.

Finished foods: Prices for finished consumer foods were unchanged in November subsequent to a 0.8- percent rise a month earlier. In November, higher prices for pork were offset by lower prices for processed young chickens.

 

Intermediate goods

The Producer Price Index for intermediate materials, supplies, and components fell 0.5 percent in November, the largest decline since a 0.6-percent drop in April 2013. Accounting for over two-thirds of the broad-based November decrease, prices for intermediate energy goods moved down 1.5 percent. The index for intermediate foods and feeds fell 0.9 percent and prices for intermediate materials less foods and energy inched down 0.1 percent. For the 12 months ended in November, the intermediate goods index declined 0.5 percent, the third straight 12-month decrease. (See table B.)

Intermediate energy: The index for intermediate energy goods moved down 1.5 percent in November, the largest decrease since a 1.8-percent decline in April 2013. Nearly three-fifths of the November drop can be traced to prices for diesel fuel, which fell 5.6 percent. Decreases in the indexes for jet fuel and lubricating oil base stocks also contributed to the decline in prices for intermediate energy goods. (See table 2.)

Intermediate foods: In November, the index for intermediate foods and feeds decreased 0.9 percent after falling 1.5 percent a month earlier. More than half of the November decline is attributable to prices for prepared animal feeds, which moved down 2.4 percent. A decrease in the index for refined sugar and by-products also factored into lower prices for intermediate foods and feeds.

Intermediate core: Prices for intermediate materials less foods and energy edged down 0.1 percent in November, the same as in October. The November decrease was led by the index for basic organic chemicals, which fell 2.0 percent.

 

Crude goods

The Producer Price Index for crude materials for further processing declined 2.6 percent in November. For the 3 months ended in November, prices for crude goods fell 3.0 percent following a 1.3-percent decrease for the 3 months ended in August. The monthly decline in November was led by the index for crude energy materials, which dropped 6.6 percent. Lower prices for crude foodstuffs and feedstuffs also contributed to the decrease, declining 0.3 percent. By contrast, the index for crude nonfood materials less energy advanced 1.4 percent. (See table B.)

Crude energy: The index for crude energy materials decreased 6.6 percent in November. From August to November, prices for crude energy materials fell 7.4 percent after rising 1.8 percent from May to August. In November, most of the monthly decline can be traced to an 11.7-percent drop in the index for crude petroleum. Lower prices for coal also were a factor in the decrease in the index for crude energy materials. (See table 2.)

Crude foods: The index for crude foodstuffs and feedstuffs moved down 0.3 percent in November. For the 3 months ended in November, prices for crude foodstuffs and feedstuffs rose 0.5 percent compared with a 5.4-percent decrease for the 3 months ended in August. The monthly decline in November was led by the index for corn, which fell 4.5 percent. Lower prices for slaughter barrows and gilts also contributed to the decrease in the crude foods index.

Crude core: The index for crude nonfood materials less energy advanced 1.4 percent in November. From August to November, prices for crude nonfood materials less energy were unchanged after moving down 0.8 percent from May to August. Leading the monthly increase in November, the index for carbon steel scrap rose 6.0 percent. Higher prices for gold ores also were a factor in the advance in the crude core index.

Source: BLS

 


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Fri, 12/13/2013 - 09:54 | Link to Comment XAU XAG
XAU XAG's picture

@bunzbunzbunz

 

I am eating grass and i see no inflation LOL

 

You sound like clinton "I did not have.................

 

Denial

Fri, 12/13/2013 - 10:24 | Link to Comment negative rates
negative rates's picture

I hope his plan is to have a one year supply of young chickens when this is all over.

Fri, 12/13/2013 - 19:11 | Link to Comment MrSteve
MrSteve's picture

that implies a previous year's plan or whatever chicken gestation period is required to have "forward guidance" chickens on hand for market acceptance during said year's term. so, Got Chicken?

Fri, 12/13/2013 - 09:56 | Link to Comment SheepDog-One
SheepDog-One's picture

Slow I.V. drip death.

Fri, 12/13/2013 - 09:58 | Link to Comment fonzannoon
fonzannoon's picture

if we are going to entertain this taper nonsense then Tyler should at least set up a sandwich exchange where anyone in a giving mood for the holidays can place a sandwich bet that the fed will reduce treasury asset purchases in Dec. The other 10,000 of us could take the other side of that bet and donate the sandwich. we could feed a few shelters.

Fri, 12/13/2013 - 10:01 | Link to Comment XAU XAG
XAU XAG's picture

And a tin of soup.................keeps longer

Fri, 12/13/2013 - 10:39 | Link to Comment Headbanger
Headbanger's picture

Keep chearleading and drinking the "no taper" Kool Aid!

Do you you really believe  the Federal Reserve will just keep on going with QE forever!!?

 

Fri, 12/13/2013 - 10:50 | Link to Comment SheepDog-One
SheepDog-One's picture

It definitely will not be this idea of some 'gradual weening off of QE', it will be a sudden halt, and when that happens no one will be concerned with a stock index.

Fri, 12/13/2013 - 09:58 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

sure sign of an expanding economy Not..Fed's pumping seems to be draining into a black hole, except try buying beef 50% inflation there, what have they got against beef? oh beef is produced by small farmer businessmen, and tea party folk , hated by GOP elite and Leftists both, now thats a mind bender and one would think the resident ZH leftist must be very confused.

Fri, 12/13/2013 - 10:08 | Link to Comment Ghordius
Ghordius's picture

"beef is produced by small farmer businessmen" - is it? I thought that most US beef is produced by huge agrobusiness companies, and then slaughtered and packaged in big biz service industries

not that I know much about US beef, EU regulations currently still ban most of it due to hormones

but I can tell you that US beef lobbyists are working hard to get those regulations down with a "nice" trade deal pushed by Cameron. which leads then to the question: if the EU imports US beef, what happens to the beef price in the US?

Fri, 12/13/2013 - 10:14 | Link to Comment XAU XAG
XAU XAG's picture

@Ghordius

 

Holy crap Brits are getting fatter as it is without adding US Hormones.

 

I expect the lobbyists will Give the NHS a $ and Uk tax payers pick up the tab for the extra work needed on the extendid waste and arses and all the bad health affects it will cause

Fri, 12/13/2013 - 10:15 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

dang nabit Ghordius...we would send you EU guys pig, but I am told it's not Halal..but no thousands of small cattle producers across our west and mid west, along with buffalo, and yes we are near that point were Americans will not be able to afford our own beef. and the EU has so many who spend much higher percent of income on food I don't think it will be going to you, china is were the beef is at.

Fri, 12/13/2013 - 10:25 | Link to Comment negative rates
negative rates's picture

Argentina is the home of the beef supply, we ran out of feed during the last drought and sold out to them.

Fri, 12/13/2013 - 10:01 | Link to Comment LFMayor
LFMayor's picture

So long as chicken and high top sneakers are subsidized, the cities won't quite burn.

Fri, 12/13/2013 - 10:18 | Link to Comment Winston Churchill
Winston Churchill's picture

Dat rayciss.

Fri, 12/13/2013 - 10:21 | Link to Comment XAU XAG
XAU XAG's picture

@Winston Churchill

 

Why Dat rayciss....................do only white folk eat chicken and wear hi end sneekers?

Fri, 12/13/2013 - 10:27 | Link to Comment Oldwood
Oldwood's picture

Everything is raycist that would be critical of the current regime, regardless of how far removed. Get with the program!

Fri, 12/13/2013 - 10:35 | Link to Comment XAU XAG
XAU XAG's picture

@oldwood

 

I was trying to be cucking funny!

Fri, 12/13/2013 - 10:55 | Link to Comment Oldwood
Oldwood's picture

That's funny! So was I! Maybe we need humor lessons.

Fri, 12/13/2013 - 10:59 | Link to Comment XAU XAG
XAU XAG's picture

@Oldwood

Just differant sides of the pond humor LOL

 

Anyways about that program!

Fri, 12/13/2013 - 10:18 | Link to Comment Oldwood
Oldwood's picture

Bullish for Popeyes chicken!

Fri, 12/13/2013 - 10:22 | Link to Comment onelight
onelight's picture

"Food producer prices were unchanged for the month, with higher prices for pork offset by lower prices for processed young chickens."

Oh yeah, blame it on the chickens...gotta be their fault...you know, chickens and all..

Headline: Chicken Union disputes government claim, says "not our fault, humans."

Fri, 12/13/2013 - 10:30 | Link to Comment Oldwood
Oldwood's picture

This figures. Just when i was thinking of getting into the chicken business...prices are falling. But BTFD? Just stymied as I'm not sure which comes first, the chicken or the egg?

Fri, 12/13/2013 - 10:53 | Link to Comment onelight
onelight's picture

Funny...word is the chickens were debating the language of their complaint, with a sizeable number wanting instead to announce: : "Nobody here but us chickens.." however the majority felt that would be interpreted as a "chickenshit" reply, and so they went with the earlier line, retaining their dignity thereby sounding more intelligent than half of the street of walls.

Fri, 12/13/2013 - 10:37 | Link to Comment XAU XAG
XAU XAG's picture

@onelight

Has the price of antibiotics droped?

 

Or has the Chinks flooded the USA with thier chicken they do not want and swawping it for pork and beef?

 

Those chinks are smart not only are they taking all the gold they are getting rid of thier crap chicken 

Fri, 12/13/2013 - 10:35 | Link to Comment Bobbyrib
Bobbyrib's picture

Looks like the Fed is not done "stabilizing" prices to me. If you believe in taper I have a bridge to sell you.. 

Fri, 12/13/2013 - 10:52 | Link to Comment Oldwood
Oldwood's picture

Their mission is not to make us believe their lies, but to believe their lies are in our best interest. Everything said and done is with a wink and a nod. They know they aren't fooling anyone. It is only important that we understand that to counter their falsities is a losing hand.

Fri, 12/13/2013 - 11:02 | Link to Comment XAU XAG
XAU XAG's picture

@Oldwood

 

Most of us have alreay lost our arms and only have our legs

 

So is that a losing.............foot?

Fri, 12/13/2013 - 11:29 | Link to Comment Oldwood
Oldwood's picture

Our oppressors do not demand our love, only obedience. They have no empathy for our losses, hand or foot...or head for that matter. If we go along, buying the fucking dip, they will do their part and keep printing the fiat to buy with. Of course even playing along doesn't ensure success as corruption ultimately only benefits a very few and we all pretty much know how this ends. But for those on top, it matters not how how high the heap is, just being on top of it is enough.

Fri, 12/13/2013 - 12:12 | Link to Comment XAU XAG
XAU XAG's picture

@Oldwood

just trying to stay in the heap at this stage

 

Good luck

XAU XAG

Fri, 12/13/2013 - 11:37 | Link to Comment deerhunter
deerhunter's picture

The rooster came before the chicken or the egg.  We began importing beef from Australia and Brazil in 1979 and it caused quite a stir as I recall TV news crews in our little 7 man meat market fearing the end of the world and such.  The imports were primarily utility grade boneless for ground beef.  US beef prices now are directly related to the drought last year that resulted in ranchers selling their cattle well before their usual weight gains.  I saw some T bones recently at 14.99 a lb.  Damn.  King Crab legs can be had for less than that and don't get me wrong,  I love beef but King Crab would win out every time. 

Fri, 12/13/2013 - 19:05 | Link to Comment MrSteve
MrSteve's picture

I know farmers and economists follow the hog-corn ratio but what do beef and / or chicken farmers follow? Obviously grain / meat ratios matter but at what level? Corn / wheat / hogs / chicken / beef / milk / bread ?? what is the triangulation? ???

Fri, 12/13/2013 - 16:25 | Link to Comment goldenbuddha454
goldenbuddha454's picture

Crouching Tiger, Hidden Inflation

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