Cost Of "Breakfast In America" Soars To Highest In Over 2 Years

Tyler Durden's picture


Another day, another indication that 'real' inflation - the kind that reduces standards of living and leeches away purchasing power for 'real' people - is anything but under control... and anything but stable. With the Oz-ians in the Eccles Building pulling levers to run the world based on their "inflation" measures, it seems that if the price of 'things that matter' soars but the Fed doesn't see them, there is no need to tighten. Last week we discussed the surge in the price of beef, pork, eggs, and shrimp, but this week, as Bloomberg notes, the price of breakfast is soaring. Between droughts affecting coffee prices and insects spreading disease in Florida, the "breakfast beverage" index is at its highest in over 2 years.



Source: Bloomberg

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Wed, 04/23/2014 - 11:45 | 4686718 Doubleguns
Doubleguns's picture

Yep and the ham & eggs is soaring too. 

Wed, 04/23/2014 - 11:48 | 4686729 Ralph Spoilsport
Wed, 04/23/2014 - 11:54 | 4686753 Doubleguns
Doubleguns's picture

Yea....well....ummm.....I don' that, but I am keeping it on the list......of survival food. 

Wed, 04/23/2014 - 11:59 | 4686776 slotmouth
slotmouth's picture

I started watering down my Coffee with some whiskey and my OJ with some Vodka.  Alcohol prices are soaring too, but I don't care as much this way.

Wed, 04/23/2014 - 12:10 | 4686812 Doubleguns
Doubleguns's picture

Slotmouth, seems that solution would work well for many of the inflated products. hic*

Wed, 04/23/2014 - 12:13 | 4686822 MonsterBox
MonsterBox's picture

and the cattle food corn being made into alcohol for use in cars.

Wed, 04/23/2014 - 12:27 | 4686865 KickIce
KickIce's picture

 I agree that it's a misuse of resources but on the flip side no one's kid has to die to when processing ethanol.

Wed, 04/23/2014 - 12:29 | 4686876 max2205
max2205's picture

Coffee up 100% in a month might have something to do with it

Wed, 04/23/2014 - 17:00 | 4687521 TruthInSunshine
TruthInSunshine's picture

Just substitute -

Play Doh Breakfast Time Playset

- brightly colored eggs, ham, toast & OJ for the real thing. Problem averted until price of Play Doh rises similarly. Remember to take fiber supplement in interim." -- From BLS-BernankYelleNomics Hedonic Substitution & Inflation Adjustment Model.

Wed, 04/23/2014 - 13:44 | 4687189 Pinktip
Pinktip's picture

MonsterBox......You've just unknowling revealed a real problem.........

Cow are not designed to eat corn ! Especially GMO, NPK fertilized.

Cows are bio-digesters designed to eat grass/hay only.

Corn is digested by HCL acid (chicken, dogs, humans etc...)

Wed, 04/23/2014 - 12:15 | 4686823 Ying-Yang
Ying-Yang's picture

Fed Chair Janet Yellen, after declaring the U.S. Federal Reserve is abandoning Quantitative Easing – code words for money printing – is now demanding the Bank of Japan (BOJ) also curtail its Quantitative Easing.

Interesting read...

"Yellen, told the BOJ to end QE because its unprecedented volume purchases of “government bonds and risky assets will negatively impact global markets.” This is a dramatic departure from former Fed Chair Bernanke’s support for QE for all."

Wed, 04/23/2014 - 12:08 | 4686806 nuclearsquid
nuclearsquid's picture

The price of one serving of scapple may still be cheap, but what goes into that serving now?  Roadkill?


Wed, 04/23/2014 - 13:53 | 4687233 Ralph Spoilsport
Ralph Spoilsport's picture

You really don't want to know.

Wed, 04/23/2014 - 12:45 | 4686948 Kirk2NCC1701
Kirk2NCC1701's picture

And in their quietest moments, even super tramps are having breakfast in america.

Wed, 04/23/2014 - 11:52 | 4686746 thunderchief
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Americans need to do more home AG, micro farming. If people don't see the industrial food complex as what it is, a pimp pushing drugs, making Americans obese zombies, then they are finished.

Wed, 04/23/2014 - 11:56 | 4686764 thunderchief
thunderchief's picture

Chris Martison's blog did a nice piece on micro farming. A guy and his wife in quebec. Everyone should do this on some scale.

Wed, 04/23/2014 - 12:16 | 4686831 Tengri Temujin
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Wed, 04/23/2014 - 12:03 | 4686772 lordylord
lordylord's picture

"Americans need to do more home AG, micro farming."


You're asking the sheeple to do work and take care of their own families.  Sheeple don't like work and responsibility.  They rather have government issued food subsitute pills.

Wed, 04/23/2014 - 12:19 | 4686843 Thorny Xi
Thorny Xi's picture

Food substiutute pills.  I've been waiting all my life for these.  And a flying car.

Wed, 04/23/2014 - 12:38 | 4686921 Big Corked Boots
Wed, 04/23/2014 - 12:39 | 4686916 lordylord
lordylord's picture

I would also like to point out that government's plan is to heard us all into cities.  These densely populated cities full of poor people will be completley dependent on government for their food.  It's hard to grow your own food in a city environment and governement doesn't want people to be food independent.  

Wed, 04/23/2014 - 12:45 | 4686933 lordylord
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My comment reminds me of what that asshole FDR did.  FDR told farmers that they couldn't grow crops to feed their own cattle because it would decrease demand from other farmers who wanted to sell their crops and therefor lower prices (FDR was a piece of shit but somehow idolized in school textbooks).  How long before government tells you that you can't grow food for personal use?

Wed, 04/23/2014 - 12:05 | 4686797 msmith9962
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Get your free online permaculture training here.


I am.

Wed, 04/23/2014 - 14:55 | 4687476 Grinder74
Grinder74's picture

What about the bacon (pork bellies)??  Can't offend the mooslums on Bloomberg or something?

Wed, 04/23/2014 - 11:48 | 4686730 Ribeye
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Beer so, 

Wed, 04/23/2014 - 12:52 | 4686979 intric8
intric8's picture

Breakfast? I skip breakfast. Cant afford it. Coffee will do, thank you very much. 

Wed, 04/23/2014 - 11:49 | 4686732 101 years and c...
101 years and counting's picture

with the amount of food yellen consumes, i'm 100% sure she's paying attention.  she (her gut) may be the best thing to happen to capitalism in years.  expect more tightening....i mean tapering, and for it to possibly even pick up pace ($15-20B/month).....

Wed, 04/23/2014 - 11:50 | 4686738 chinoslims
chinoslims's picture

Has the Fed hit its inflation target yet?  How come the Fed keeps changing the criteria for inflation?

  Answer: with a $17 trillion debt, servicing the debt would be impossible without interest rate increases.  DEFAULT BITCHEZ

Wed, 04/23/2014 - 11:55 | 4686757 robilla
robilla's picture

Uhhh... that doesn't really make sense.

If they increase rates, then the cost of future issuance (needed to cover the cost of existing issuance and increased gov't debt) increases as well.

We're screwed no matter what.

That is, unless, we stop borrowing now, slash expenses and roll out all existing debt to long-term rates... then just stop.

Wed, 04/23/2014 - 13:26 | 4687105 intric8
intric8's picture

Yellens personal inflation target is 15 bucks for a carton of OJ, ten bucks for a gallon of milk and a buck an egg. At those prices she will feel especially special eating as much high quality food she wants, in the fed reserve luxury facility, for free

Wed, 04/23/2014 - 11:50 | 4686739 Son of Loki
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Unpossible!? The CPI has been zero to 1.6% for the past 8 years.


Wed, 04/23/2014 - 11:51 | 4686743 Lendo
Lendo's picture

I like how the Fed acts like rising prices are good for consumers and the economy.  They are forcing millions of middle-class people to go on food stamps and other government assistance.

What a crock of shit.

Wed, 04/23/2014 - 11:53 | 4686751 Flakmeister
Flakmeister's picture

Is the Fed now responsible for swine related epidemics and drought related factors? 

Wed, 04/23/2014 - 12:09 | 4686800 Dr. Engali
Dr. Engali's picture

No but they are responsible for the hot money that flow into these commodities and make the problem worse. If the speculative money knows of issues seasonal or otherwise they will front run real buyers.

Wed, 04/23/2014 - 12:10 | 4686813 fonzannoon
fonzannoon's picture

breakfast has got nothing on lunch though. 

Wed, 04/23/2014 - 12:15 | 4686829 Flakmeister
Flakmeister's picture

It works both ways....

I ain't buying your explanation...

Wed, 04/23/2014 - 12:25 | 4686846 Dr. Engali
Dr. Engali's picture

So what you're saying is you're a hot money denier. Well I have the consensus of the financial community on my side. ;)

Wed, 04/23/2014 - 12:29 | 4686874 Squid Viscous
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wait til the price of gravlax starts to explode, then you will see some serious QE tapering

Wed, 04/23/2014 - 12:34 | 4686903 Flakmeister
Flakmeister's picture

What makes you think that it already hasn't?

Wed, 04/23/2014 - 12:33 | 4686896 Flakmeister
Flakmeister's picture

No, but the effect is not what many here believe it to be....

Wed, 04/23/2014 - 12:34 | 4686907 Quus Ant
Quus Ant's picture

I have an open mind, Flak.  For better or worse.  Elucidate.

Wed, 04/23/2014 - 12:48 | 4686944 Flakmeister
Flakmeister's picture

Speculators can cause the underlying trend to overshoot or undershoot it's "fair value" but the imbalance does not last long...

Or, looking at it another way the market can be "rigged",  recall Goldman and the aluminum market where the inflationary effect was negligible but by skimming a tiny amount on a huge volume they made big bucks...


Now, off the top of your head, are pork bellies and coffee in backwardation or contango?

Edit: got to smile, my 5000 share position in HGT is flying today....

Wed, 04/23/2014 - 13:09 | 4687039
Wed, 04/23/2014 - 16:07 | 4687701 Quus Ant
Quus Ant's picture

well, if I'm going off the top of me head then I don't really give a shit. 

So they're skimming small sums off the top and getting away with it.  In my experience with humans when given a green light to steal they never settle for pennies.

Wed, 04/23/2014 - 12:44 | 4686942 KickIce
KickIce's picture

I really don't think the commodity price itself is that big of an issue when one bushel of wheat makes 42 loaves of bread.  At eight dollars which is considered high that's only .20 cents for a $3 loaf of bread.  Even if it wentup to $20/bushel that's still less than .25 cents of actual wheat.  The typical margin of a farmer is very low.

Wed, 04/23/2014 - 12:45 | 4686950 Flakmeister
Flakmeister's picture

There you go...

Wed, 04/23/2014 - 12:53 | 4686981 Dr. Engali
Dr. Engali's picture

I and my partners deal with a lot of farmers and they are all having tremendous years (why do you think farmland is so high?). Their success has led to record years for us. Your explanation doesn't hold water. Try again.

Wed, 04/23/2014 - 13:32 | 4686990 KickIce
KickIce's picture

Yes, the large farmers are very profitable based on volume, the smaller operator not so much.

As far as farmland goes it's just as distorted as any other market.  I've seen land go for $10K/acre in Iowa.  Current prices for corn are about $5/ bushel and even if you get 200 bushels of corn an acre it still takes 10 years to pay off that land.  And that assumes the coop gives you fertilizer for free, Monsato drops of the seeds for free and the field plants / harvests itself with free equipment from John Deere.

Wed, 04/23/2014 - 12:53 | 4686982 KickIce
KickIce's picture

Edit:  should be $10/bushel = .25 per loaf.

Wed, 04/23/2014 - 13:01 | 4687014 alangreedspank
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Speculators are not a problem, unless they are given a really low prime rate to do so! We all know this schemes are not funded with money borrowed on 30 years!

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