The Real Inflation Fear - US Food Prices Are Up 19% In 2014

Tyler Durden's picture




 

We are sure the weather is to blame but what happens when pent-up demand (from a frosty east coast emerging from its hibernation) bumps up against a drought-stricken west coast unable to plant to meet that demand? The spot price (not futures speculation-driven) of US Foodstuffs is the best performing asset in 2014 - up a staggering 19%...

 

 

h/t Bloomberg's Chase van der Rhoer

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Wed, 03/26/2014 - 12:47 | 4594254 RevRex
RevRex's picture

NeoContrails right?

 

Do you blame the Jews?

 

 

Wed, 03/26/2014 - 15:12 | 4594983 Golden Rule
Golden Rule's picture

No jackass it's all just a huge bullshit conspiracy...
http://thecolbertreport.cc.com/videos/lv0hd2/david-keith

Wed, 03/26/2014 - 17:38 | 4595789 Flakmeister
Flakmeister's picture

Amazing what can happen once the effects of losing a huge amount of arctic ice really kicks in...

BTW, the persistent high pressure ridge in the NW which is responsible for the shift was predicted in 2005...

http://journals.ametsoc.org/doi/full/10.1175/EI171.1

You can get the laymans version here

http://thinkprogress.org/climate/2014/03/07/3370481/california-drought/

Wed, 03/26/2014 - 20:57 | 4596673 ncdirtdigger
ncdirtdigger's picture

OK then Henny Penny

Wed, 03/26/2014 - 22:05 | 4596954 mt paul
mt paul's picture

up north as the permafrost melts

it is releasing lotz of methane 

which is a really ugly green house gas

Wed, 03/26/2014 - 23:40 | 4597267 Seer
Seer's picture

Yes, folks have been woefully overlooking this.

The "problem" is litterally under our feet:

http://www.agweb.com/article/topsoil_erosion_costs_farmers/

Wed, 03/26/2014 - 11:13 | 4593807 John McCloy
John McCloy's picture

   Well the obvious solution is to print more money like we have been doing the past few years and change the math and lie so it is not counted. All the while other nations are moving closer to creating a dueling reserve currency backed by tangible assets/commodities basket or "Traditions" such as gold.

   Fake it till you make it or ya break it. The most important thing is that the uber wealthy were made whole and then some because they had cash fiats to put into the market and the lower class does not have to pay a dime "for now" because Uncle Cheddars is giving them nearly free everything and the Middle Class who funds both and suffers the most by having their savings confiscated to the tune of 600 Billion a year because they get 0% return on savings...well enjoy that small 401K and bend over for that Red,White & Blue "Freedom" Cock jammed straight up your Candy Crush Obsessed Asses.

Wed, 03/26/2014 - 23:45 | 4597276 Seer
Seer's picture

Growth is dead.  US empire is about to die (as all empires eventually do).  Based on these facts I'd have to state that one needs to adjust how one measures things.

All those other countries are pretty much fucked too.  If you're an exporter then who are you going to export to when everyone else is broke?  Pretty much will be foreced to regional trade.

The US still has a lot of resources (though exploitation practices will have to be modified).  Same with Canada and Russia.  Pretty much everyone else is in a tough way...

Wed, 03/26/2014 - 11:13 | 4593809 zaphod42
zaphod42's picture

We can print it on our 3-D printers.  Counterfeit food!!  

 

Craig

Wed, 03/26/2014 - 12:11 | 4594106 SmittyinLA
SmittyinLA's picture

Pink slime is not counterfeit, its real and contains real prions & vitamins 

Wed, 03/26/2014 - 11:13 | 4593816 toady
toady's picture

Gallon of milk went from $1.89 to $1.99 a couple weeks ago. I guess that price is gone forever.

Average weekly grocery bill went from just over $100 a week a year ago to close to $150. I suppose we're ahead of that 19% curve...

Wed, 03/26/2014 - 11:16 | 4593831 NaiLib
NaiLib's picture

From where I sit we pay 2 USD for One litre of milk....(Europe)

Wed, 03/26/2014 - 12:25 | 4594161 Herd Redirectio...
Herd Redirection Committee's picture

Good, now convert those litres to gallons, and what do you get?

Wed, 03/26/2014 - 13:34 | 4594446 Flakmeister
Flakmeister's picture

$7.60 per US gallon....

Wed, 03/26/2014 - 15:40 | 4595154 BeerMe
BeerMe's picture

Only $1.99 for a gallon!  That is cheap!  It is over $4 around here.

Wed, 03/26/2014 - 22:55 | 4597140 usednabused
usednabused's picture

U don't say? Up to 1.99 huh? Ya, candy bars went up to 6 cents from a nickle here! Oh wait.... that musta been last week?

Wed, 03/26/2014 - 11:16 | 4593833 Max Cynical
Max Cynical's picture

Serious question...

What would cause such volitality starting in September and the hockey stick explosion in December? I expect gradual food inflation but not with such explosive growth.

Wed, 03/26/2014 - 15:08 | 4594968 seek
seek's picture

Weather, changes in real cost of inputs (grain goes up, means feed goes up, means meat goes up). Note that while this article discusses prices outside of the futures market, hot money getting dumped into something like grains could raise real input costs.

There's probably some other artifacts at work (companies defering price increases until end of year, legislation artifacts like Obamacare costs kicking in, etc.) Most likely it's a combination of the many negative trends we've been seeing all arriving at once.

Wed, 03/26/2014 - 23:55 | 4597301 Seer
Seer's picture

I figure that it's just a delayed build-up, that most companies have been holding back on price increases (doing other things to try and make it appear so in order to keep from losing market share), and that the margin compression has gotten to the point where they've got no other choice: kind of caught between a rock and a hard spot, market share on one side and shareholders on the other... (it's one reason why I'm not all that hard on companies, as I know none of this is easy).

My feed costs are holding pretty steady.  They've actually dropped of late just as the mill owner told me they would (told me last fall that prices would be lower heading in to spring).

Wed, 03/26/2014 - 11:17 | 4593837 Itchy and Scratchy
Itchy and Scratchy's picture

Kenyan Solution: Meal Sharing!

Wed, 03/26/2014 - 11:19 | 4593849 Spungo
Spungo's picture

Let them eat iPads

Wed, 03/26/2014 - 11:24 | 4593875 TalkToLind
TalkToLind's picture

They already are and yep, the taxpayers are paying for it:

http://wilmette.suntimes.com/news/schools/ipadgo-WIL-04032014:article

Wed, 03/26/2014 - 14:08 | 4594614 mt paul
mt paul's picture

let them eat pussie..

Wed, 03/26/2014 - 11:21 | 4593855 Itchy and Scratchy
Itchy and Scratchy's picture

Moar Biofuels!!!!!

Wed, 03/26/2014 - 23:57 | 4597308 Seer
Seer's picture

I was happy to see that they cut back on the legislated mandates.

Wed, 03/26/2014 - 11:21 | 4593857 Jack4952
Jack4952's picture

The upcoming elections in November will change NOTHING. Republicans and Democrats are just rival Mafia-like organizations.

I see the media are giving Rand Paul more favorable treatment than in the past. I expect the media will soon be promoting him as the next "messiah", just as they did Barack Obama in 2008.

The REALLY SAD part is that the American people will probably be SUCKERED once again!

What is it about people that they always seek ONE MAN to solve all their problems, rather than taking individual responsibility?

The average man’s love of liberty is nine-tenth’s imaginary, exactly like his love of sense, justice and truth. He is not actually happy when free; he is uncomfortable, a bit alarmed, and intolerably lonely. Liberty is not a thing for the great masses of men. It is the exclusive possession of a small and disreputable minority, like knowledge, courage and honor. It takes a special sort of man to understand and enjoy liberty--and he is usually an outlaw in democratic societies. It is, indeed, only the exceptional man who can even stand it. The average man doesn’t want to be free. He simply wants to be safe.” - Henry L. Mencken (1880-1956), Journalist and Author

Wed, 03/26/2014 - 11:29 | 4593900 the grateful un...
the grateful unemployed's picture

mafia-like?

Wed, 03/26/2014 - 12:27 | 4594165 Jack4952
Jack4952's picture

Yes. "Mafia-like".

Or have you already forgotten the 2012 Republican convention where delegates for Ron Paul were physically removed from the convention hall prior to the nominating vote? In addition, other Ron Paul delegates from several states (e.g., Massachusetts) were not "recognized" by the RNC and were totally excluded.

 

 

Wed, 03/26/2014 - 12:29 | 4594169 Herd Redirectio...
Herd Redirection Committee's picture

The ? implies that the use of -like was unnecessary.

Fri, 03/28/2014 - 17:42 | 4603875 MeelionDollerBogus
MeelionDollerBogus's picture

I got the joke. It's not "mafia-like" when it's "Mafia: Actual".

Wed, 03/26/2014 - 11:31 | 4593909 tvdog
tvdog's picture

Yes. Rand Paul is now said to be the front-runner for the Republican nomination in 2016. Republican Party knows they screwed up big time with their mistreatment of Rand's father, alienating a significant part of their base (including me).

Sorry, guys, it ain't gonna work. I, for one, am done with the Republican Party forever, regardless of what they do from now on.

Wed, 03/26/2014 - 15:14 | 4594992 seek
seek's picture

If Rand were able to actually change things for the better and get elected, they'd have him killed.

It wasn't just the republicans that mistreaded his father, it was pretty much everyone involved -- the (D)s, the (R)s, the media, TPTB, etc. It was a big clue Ron was legit. The entire system is corrupted, and votes don't matter other than to justify TPTB's choice of spokesman.

Wed, 03/26/2014 - 12:25 | 4594138 mophead
mophead's picture

"What is it about people that they always seek ONE MAN to solve all their problems, rather than taking individual responsibility?"

It's called social engineering.

We are programmed from day one to believe in superheros that are able to save the day and protect us from crime and corruption: Batman, or a world disaster or evil-doers that are plotting our enslavement: Superman. When we grow up we're fed the same programming through other films. These films tend to portray cities or towns that are dominated by corrupt figures, including politicians and law enforcement. No one can do anything (the citizens are portrayed as impotent/defenseless) and then a loneman comes into the picture that cleans up the town: Clint Eastwood, Roddy Piper (They Live, which everyone should watch) We are not able to "see" the programming because it's so prevalent. Like somebody once said, "if you ask a fish what's the most significant aspect of its environment, the last thing it would say would be water". See through the programming, Bitchez.

Fri, 03/28/2014 - 17:43 | 4603877 MeelionDollerBogus
MeelionDollerBogus's picture

Even ancient tribes had tribal leaders. Followers attaching to leaders is unhealthy but completely normal for all human societies.

Thu, 03/27/2014 - 00:03 | 4597328 Seer
Seer's picture

This paper pretty much claims that ideologies have absolutely no play in the demise of empires, that ALL empires collapse:

http://www.rexresearch.com/glubb/glubb-empire.pdf

I again am thankful for some fellow ZH-er sharing this.  It really is one of the best pieces I'd ever run across.

Wed, 03/26/2014 - 11:21 | 4593858 gmckae
gmckae's picture

In our area, cattlemen are culling heards, supplementing grain for grass feed.  Cost of meat will go up.  Farmers in central valley are eliminating and or cutting crops size due to lack of water.

 

All adss up to higher food prices

 

Thu, 03/27/2014 - 00:26 | 4597376 Seer
Seer's picture

It's going to be a long haul as the cow herds are also being reduced.  Takes several years to bring these back up.

Most folks around me do grass.  It's all I'd ever look to do (I'm angling toward it).  And after years of study and monitoring and seeing that the grass folks have managed better than the grain folks I'm pretty much sold.

Switching to grass ain't something that is done over night.  Actually need to shift genetic (new herds).  And then grass management itself involves a lot of "art" as well as science: one has to be include incredible dynamics of the land used.

It's been a while since I've seen any reports from the industry, but I recall a couple of years ago that the industry was losing quite a bit per-head.  How in the heck can anyone stay in business that way?  When boom times were here there was the extra padding/profit from hides (high-end cars), but that's pretty much gone now, and I suspect that had been the difference.  And, well, the ethanol impact (on conventional grain-fed).

Wed, 03/26/2014 - 11:23 | 4593869 Sutton
Sutton's picture

Big Pretzel (Rold Gold) got me yesterday.. The long, cigar like pretzels now come in 10 oz. bags for the same price.

Oh yeah, I'm an American, so I'm too dumb to notice.

 

Wed, 03/26/2014 - 11:25 | 4593891 RevRex
RevRex's picture

Bacon now comes in a 12 oz package for only $1 more!

Wed, 03/26/2014 - 11:24 | 4593882 RevRex
RevRex's picture

So the $1 12 oz can of tuna that is now 5 oz (4 OZ when you don't count the water) has gone up in price? But but but, it's still $1

 

Imagine that!

Wed, 03/26/2014 - 11:55 | 4594034 Wile-E-Coyote
Wile-E-Coyote's picture

At least the Tuna glows in the dark, and it cooks itself.

 

Thu, 03/27/2014 - 00:27 | 4597379 Seer
Seer's picture

Hedonics on display!

Wed, 03/26/2014 - 11:27 | 4593896 IridiumRebel
IridiumRebel's picture

I do the shopping. I have a background in restaurants and purchasing so I do it. I showed my wife the last few grocery bills. She was floored. I know what i am doing too. I do the math too. I will see how much a package is and the weight and what not. We buy a lot of organic. Every nickel counts. The inflation is becoming more noticeable. I'm sure having dollars instead of PMs is the way to battle this....not.

Thu, 03/27/2014 - 00:41 | 4597402 Seer
Seer's picture

As bad as it appears one can take solice (?) in the fact that it's worse in most other places.

I've watched the CAD/USD  exchange for several years now.  Canadians were flowing across the border as the CAD actually got to be valued higher than the USD.  Now it's down to $0.89.  As inflated as things might be here in the US it was, for a time, cheap for Canadians, until now.

Even had I not encountered that fatal boating incident I very much doubt that I'd be applying PMs  now.  As shitty as it is I'll still opt to apply the USD.  AND, whenever I think that things are "bad" I just look at my wife, as she's from the Philippines and can remind me what "bad" REALLY means: I never really have to question it, as I've been there and I know all about how most of the world lives.

Wed, 03/26/2014 - 11:28 | 4593897 tvdog
tvdog's picture

No doubt speculation in the futures markets for food (which should not be permitted to exist) on the part of Goldman and other banks will triple any price increase due to market forces.

Thu, 03/27/2014 - 00:48 | 4597425 Seer
Seer's picture

Why should this not be allowed?

Where/how are we going to properly price food?

Food in the US still continues to be extremely inexpensive.  No doubt that food budgets are starting to increase, but that is as it should be given true fundamentals: Food, Shelter and Water.  That people should be spending less on non-fundamentals isn't a crime, rather, it's about being wise.  We've been so messed up for so long that we don't know what is right and what is wrong...

GS and its big playing field will collapse.  As they suck more and more people will shift away from their system (no other choice), and while this is going to be painful it is necessary (meaning that people should look to embrace it- otherwise one is lobbying to "correct" a bad system, which will never fix it).  BAD SYSTEMS FAIL- let them fail!

Wed, 03/26/2014 - 11:28 | 4593898 combatsnoopy
combatsnoopy's picture

Um, we got hit with a monsoon in Socal just 2 weeks ago and it just rained this morning.
California is technically a desert.  And if nobody got the memo, deserts are permanent droughts. 

It's actually wetter now than it was 10 years ago, thank God.

Also, in the 90's, the WHO produced a report that there was over 6 times the calories to meet the needs for a world population of 6 billion.  And the only barriers to food now were corrupt governments and poverty (corrupt governments).

This report actually exists.  Wall Street is using tax dollars (quantitative easing) to push up the price of food.  I actually met a persian finance grad from a known school wannabe entertainer who said that "there's nothing else to make money off of".

Yes, these people from the middle east are very "Bright" (I'm being sarcastic). 

Thu, 03/27/2014 - 01:06 | 4597457 Seer
Seer's picture

"It's actually wetter now than it was 10 years ago, thank God."

Please provide a reference, thank you.

I'd hope that folks there are cautious about trying to scale up as though that increase in moisture is permanent.

The WHO report said that corrupt governments were the ONLY barrier, or the most signficant one?  I can understand the impacts of corruption, and I wouldn't take this lightly (though, one can hardly correct this when a country is poor [and unlikely to be anything other than poor]).

"Wall Street is using tax dollars (quantitative easing) to push up the price of food.  I actually met a persian finance grad from a known school wannabe entertainer who said that "there's nothing else to make money off of"."

I've been saying (I'm in food production, small scale) that food prices have been suppressed.  I suspect that Wall Street knows this.  And I also suspect that anyone with more than a couple of brain cellls ought to understand that it all comes down to: Food, Shetler and Water.  The "Shelter" thing has pretty much been hammered, and the "Water" thing is a bit tough to really earn anything off of.  Pretty much leaves Food.  I suppose that money going into Food is better than it being pulled out of.

I'm pretty much in agreement with that finance grad.  This is why I'm taking up farming: well, I'm not so much doing it because I want to "make money," it's because I have to do something for work and I'd rather be my own slave than someone else's slave (I'd prefer to manage my own land, or be responsible for managing land than to be some "hired hand" and not have a full connection with the land).  Someday I might be the boss of one of these "financial" grads.

Fri, 03/28/2014 - 17:47 | 4603902 MeelionDollerBogus
MeelionDollerBogus's picture

Shipping food always has the risk of getting it spoiled, lost or stolen.
The only solution is the removal of all "illegal" status for immigrants so people can move to where the food is and stay.

Wed, 03/26/2014 - 11:30 | 4593905 hotrod
hotrod's picture

I like Cape Cod potato chips.  In Georgia 3.79 for 8oz.  This price is similar to Frito Lay. I can buy 10lb bag of potatos for $5.  With tax Cape Cod is $8 per lb.  Should I buy meat or chips at that price per lb.?

 

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