Producer Prices Surge Most In Over Four Years As BLS Discovers Food Inflation

Tyler Durden's picture


And just like that, the BLS is reacquainted with soaring food prices.

Moments ago the US government reported that producer prices, as part of a newly reindexed PPI series, spiked by 2.1% from a year ago, or a whopping 0.6% surge in April, the biggest monthly jump since January 2010, and up from the 0.5% increase in March.

So what caused this surge in producer prices? Why food costs of course, which in April soared by 2.7%.

Here is the explanation for the finished goods price surge:

Special grouping, Finished goods: The index for finished goods moved up 0.7 percent in April. (The finished goods index represents about two-thirds of final demand goods, through the exclusion of the weight for government purchases and exports. The finished goods index represents about one-quarter of overall final demand.) The broad-based increase was led by the index for finished consumer foods, which advanced 2.4 percent. Prices for finished goods less foods and energy and for finished consumer energy goods rose 0.3 percent and 0.5 percent, respectively. Within finished goods, higher prices for meats, gasoline, light motor trucks, residential electric power, processed poultry, and eggs for fresh use outweighed lower prices for residential natural gas, passenger cars, and soft drinks.

It wasn't just finished goods that was burned by food prices. Processed goods by intermediate demand...

In April, the index for processed eggs jumped 25.3 percent. Prices for ethanol, meats, gasoline, and commercial electric power also increased. Conversely, the index for jet fuel declined 5.3 percent. Prices for diesel fuel, primary basic organic chemicals, natural gas to electric utilities, and soybean cake and meal also fell

Unprocessed goods too...

The index for unprocessed goods for intermediate demand rose 0.4 percent in April after edging down 0.1 percent a month earlier. Leading the advance, prices for unprocessed foodstuffs and feedstuffs moved up 3.6 percent.


In April, a 9.4-percent jump in prices for slaughter chickens led the advance in the index for unprocessed goods for intermediate demand. The indexes for slaughter hogs, corn, soybeans, carbon steel scrap, and crude petroleum also moved up.

And so on. The good news however is that as food prices soar, and as rents hit all time highs, wages are rising in lockstep. Oh wait, nevermind.

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Wed, 05/14/2014 - 08:55 | 4758345 SilverIsMoney
SilverIsMoney's picture

Theres no inflation, Lagarde told us so! If anything we have lowflation she says!!!


Were so fucked, but at least the cartel caps in gold have been failing miserably. Look at that! 1310 approaches!

Wed, 05/14/2014 - 09:00 | 4758363 ghengis86
ghengis86's picture tomato plants are inflating their height right now. Some heirloom seeds were a little more expensive this year, but I can absorb a10% increase on a seed packet since that translates into only a few fractions of a penny per ear of corn, bean pod, etc

Wed, 05/14/2014 - 09:07 | 4758392 Headbanger
Headbanger's picture

It's the weather.. Again.

Wed, 05/14/2014 - 09:14 | 4758423 pods
pods's picture

Wait till the dolla dies and they all come crashing back ashore.

Got junk silver?


Wed, 05/14/2014 - 09:44 | 4758583 gmrpeabody
gmrpeabody's picture

The last time I bought a case of beer..., (I don't always drink beer) there were only 18 bottles in there.

Didn't it used to be 24???

Wed, 05/14/2014 - 11:37 | 4759157 eclectic syncretist
eclectic syncretist's picture

The Fed wants to tighten so now there is inflation. 

Wed, 05/14/2014 - 09:35 | 4758538 Tabarnaque
Tabarnaque's picture

Ghengis86, they will soon make it illegal for you to grow your own food. I suspect you will be called a terorist or not respecting one of Monsanto's zillon patented seeds.

Wed, 05/14/2014 - 11:02 | 4758994 New Ordnance
New Ordnance's picture

Shameless promotion:

Painted Mountain Corn Seed -Heirloom, Non-GMO, Fukashima-Free. Grows where no other corn will grow for liberty-minded folk.

Wed, 05/14/2014 - 10:14 | 4758760 saveUSsavers
saveUSsavers's picture

Trying some Heir Stripies this year and some cooler-weather varieties/ San Fran Fog, Stupice, San Diego, and my standard Patio (in the ground) on San Diego coastal. Water bill hurts bigtime.

Wed, 05/14/2014 - 09:59 | 4758664 oklaboy
oklaboy's picture

And the WSJ sez today Fannie and Freddie ( in bankrupcy?) lowering the credit standards for we can starve in our McMansions, just like washing your hair, wet, scrub, wash and repeat....... 

Wed, 05/14/2014 - 08:55 | 4758347 NoDebt
NoDebt's picture

Thank goodness food isn't included in the CONSUMER Price Index or this might be a problem.

I reitterate- whoever decided long ago to exclude "volatile food and energy prices" from CPI was a visionary.

Wed, 05/14/2014 - 08:59 | 4758358 Grande Tetons
Grande Tetons's picture

Net the bullshit to which you have will be interesting to see tomorrow's consumer CPI. Sure, it is all rigged and full o shit...that is why I am only mildly interested. 

Wed, 05/14/2014 - 09:10 | 4758404 madcows
madcows's picture

Naw, those things swing wildly.  That's why they aren't part of CORE CPI.  Don't worry, though.  They are just as likely to come down in price as they are in going up.  Rest assured, eating and driving will get cheaper... soon.  The FED says so.

Wed, 05/14/2014 - 09:42 | 4758475 intric8
intric8's picture

They'll be backing out the 'peanut' costs from the manufacture of peanut butter soon to tweak figures with food inflation. It has the consistency of butter, therefore it is 'butter'

Wed, 05/14/2014 - 09:19 | 4758444 101 years and c...
101 years and counting's picture

you can say that about creating the Fed in 1913 or throwing out the gold standard in 73,  The goal has always been to fuck the bottom 90%.

Wed, 05/14/2014 - 08:57 | 4758351 fonzannoon
fonzannoon's picture

"And so on. The good news however is that as food prices soar, and as rents hit all time highs, wages are rising in lockstep. Oh wait, nevermind."

Exactly. CNBC is reporting that the bad news is, prices are going up. the good news is, wages are not. Therefore we can't have inflation. So what we have is the consumer getting eaten alive. The only question is, when will the masses rise up and demand moar? My guess is never, they will do the right thing and go starve in a ditch.

Wed, 05/14/2014 - 09:14 | 4758420 Dr. Engali
Dr. Engali's picture

No, they will come raid your kitchen, then go starve in a ditch.

Wed, 05/14/2014 - 08:57 | 4758353 NDXTrader
NDXTrader's picture

It's walking and quacking like stagflation

Wed, 05/14/2014 - 09:01 | 4758366 bigkahuna
bigkahuna's picture

Venezuela time!

Wed, 05/14/2014 - 09:08 | 4758390 fonzannoon
fonzannoon's picture

So the unemployment rate is now close to 5% and inflation (even the phony numbers) is starting to come in hot. This is with a negative GDP print. Fucking hysterical. This whole thing is hysterical. 

The only thing we know is this is not your 70's stagflation that will be met with Volker and 25 years of rising wages and a booming economy.

Wed, 05/14/2014 - 09:39 | 4758553 youngman
youngman's picture

What is amazing is how the bond rates are falling...all over the is that happeing????

Wed, 05/14/2014 - 09:48 | 4758614 fonzannoon
fonzannoon's picture

Wages wages wages. Don't forget that. You don't get interest rates and gold and inflation spiraling out of control without wage inflation.

Wed, 05/14/2014 - 09:18 | 4758437 firstdivision
firstdivision's picture

I've been singing that song and dance on this site since I started.  We are the 1970's reincarnate.  keep an eye on rates, as this shit is going to be a wild ride.

Wed, 05/14/2014 - 09:42 | 4758568 Eyeroller
Eyeroller's picture

Don't worry, Aunty Ponzi Munchkin will just print more money.  Problem solved.  Markets rally.

Wed, 05/14/2014 - 08:57 | 4758354 Agent P
Agent P's picture

Chained PPI...just find a substitute for food and problem solved.  You're welcome. 

Wed, 05/14/2014 - 09:01 | 4758367 Osmium
Osmium's picture

Soylent Green?

Wed, 05/14/2014 - 09:13 | 4758399 FieldingMellish
FieldingMellish's picture

Defecake. The new name in snack foods.

Wed, 05/14/2014 - 08:57 | 4758355 Sudden Debt
Sudden Debt's picture


Obama is really doing his best he....

Wed, 05/14/2014 - 09:01 | 4758365 Yen Cross
Yen Cross's picture

    If you want your inflation, you can keep your inflation.

Wed, 05/14/2014 - 09:04 | 4758377 Seasmoke
Seasmoke's picture

I guess we have hit Peak smaller packaging !!!!

Wed, 05/14/2014 - 09:13 | 4758417 Sudden Debt
Sudden Debt's picture

It's all part of the "fight obesity" programm... it's working...

Wed, 05/14/2014 - 09:04 | 4758378 Sean7k
Sean7k's picture

It is the " War of Dependence". to the degree you are dependent on the State and its' crony corporate partners, you will be impoverished. 

I think it works like this: As long as a society can produce gains in value, the Elites reward them with a rising standard of living, but once the value of goods and services begins to decrease, they use their central banking tools to break us. They then move production to countries were value can be re-established, leaving an empty quarry, an empty husk to further degrade. 

Trusting in the State seems to have serious drawbacks. Trusting in ourselves and communities can offer hope. Starve the parasites and feed your family. Break the cycle of dependence that is spiraling into slavery.

Wed, 05/14/2014 - 10:34 | 4758849 Cathartes Aura
Cathartes Aura's picture


"Trusting" the State is Believing the myth of inherent Specialness, and the privilege that comes with the story.

once the resources - human especially - have been "used" then The Parasites will pick up and move to the next Host, and begin the process

of sucking Them dry.  it's what The Parasites do.  no humans are inherently (more) Special, on a long enough timeline. . .

Wed, 05/14/2014 - 09:04 | 4758382 Abitdodgie
Abitdodgie's picture

Obama is one of the best pres we have ever had , look at all the people in Amerrika that do not have to work any more . Give him another couple of years and we will all be able to stop working .   OBAMA 2016  rarara.

Wed, 05/14/2014 - 09:08 | 4758395 FieldingMellish
FieldingMellish's picture


Wed, 05/14/2014 - 09:05 | 4758384 redbird
redbird's picture

Chinese purchase of Smithfield looking like a pretty good move about now. 

Dump those paper dollars for a productive asset from american debt slaves.


Wed, 05/14/2014 - 09:09 | 4758397 SheepDog-One
SheepDog-One's picture

'Productive asset from american debt slaves'....about the only thing I can think of is making soap from their liposuction fat?

Wed, 05/14/2014 - 09:17 | 4758430 pods
pods's picture


Wed, 05/14/2014 - 11:37 | 4759133 tip e. canoe
tip e. canoe's picture

don't lye to us pods


Wed, 05/14/2014 - 10:41 | 4758891 Cathartes Aura
Cathartes Aura's picture

"Chinese purchase of Smithfield" was a tell. . . they love pork, their pigs were seen belly-up, floating downstream by the thousands. . . and recently what happened to the CAFO piglets?

add the fact that the Chinese are buying up property in amrka coast-to-coast, states are starting to compete for the privilege of hosting their factories/communities. . .

it's all right there, happening in front of our eyes.

Wed, 05/14/2014 - 11:00 | 4758988 tip e. canoe
tip e. canoe's picture

regardless of who owns what, still the questions remain:

1) what do the piggys eat? & 2) what to do with all the piggy shit? (the toxicity of which is highly dependent on #1)

j.salatin has an answer:

imho, worth the silver dollar if you got some woods.

Wed, 05/14/2014 - 11:08 | 4759004 Cathartes Aura
Cathartes Aura's picture

absolutely agree, forested pigs are the way to go.

and when you're ready to harvest, these folks are also worth watching, learning from, and tipping a few silvers towards. . .

Farmstead Meatsmith

On the Anatomy of Thrift

(beautifully produced videos on how the whole pig is used)

Wed, 05/14/2014 - 11:33 | 4759130 tip e. canoe
tip e. canoe's picture

wow, those cats are super cool, thanks cat.  and only a silver quarter and change for the recipe book, sweet.

toughest thing bout raising animals naturally in the glens is those dastardly predators.

sound familiar?  (at least they don't develop as many parasites tho)

Wed, 05/14/2014 - 11:58 | 4759263 WillyGroper
WillyGroper's picture

Diatomecous Earth.

Wed, 05/14/2014 - 12:43 | 4759489 Cathartes Aura
Cathartes Aura's picture

agreed about the Farmrun folks - a whole mess o' super cool folks working together as community. . .their vids about using the whole pig, various curing & cooking methods, were a revelation to me, and we're now working towards this as part of our set-up. . .

thinking one where it's kept smaller, and where local folks "sponsor" their meat in advance, helps keep ones neighbours fed, in tune with a community-vibe, helps cut back on those other "dastardly predators" that inevitably are drawn in. . . keeping it small-er, integrated with other food produced & bartered (variety, just in case), AND working to get more "locals" on board just strengthens the circle drawn - inclusive vs. exclusive.

and willygroper's diatomaceous earth - for ALL of us, inside 'n' out, just great stuff, big ole bags of it a must have!

self-sufficiency, within community - it's incoming, if yer smart!

Wed, 05/14/2014 - 13:34 | 4759691 tip e. canoe
tip e. canoe's picture

ya sister, from Fight Club to pork club :)

right on cue, from Gene Lodsgen today:

The giant animal factories that do raise their own animal feed are in a stronger position but their dependency on weather, hired labor, animal diseases and other factors beyond their control are so much greater than for smaller, family farms that subsidies, tax breaks and other incentives will always be necessary for them to stay in business. In a democracy, when the majority of the people think they know a better way that will not cost them so much fruitless money, they won’t vote for the subsidies. Even the most socialistic or capitalistic society will in the long run spurn anything that is basically not economical if there is another way.

Wed, 05/14/2014 - 18:15 | 4760789 Cathartes Aura
Cathartes Aura's picture

oohh, thanks for that link - I like him!

unlike Mr. Contrary, I spent most of my years in cities, both living in, and touring with bands. . .and mostly vegetarian for many reasons - however!

. . .husbandry is rarely if ever profitable if you don’t grow your own animal feed. You can always grow it cheaper than you can buy it and if you can’t you are in the wrong business. And you don’t have to make a profit directly from the feed, but from the milk and meat the feed produces.

my desire to grow/source healthy food (and medicinals/tinctures) for self and family-of-choice (aka land partners) is now extended to knowing the future lies in being as self-sufficient as possible, and that bartering for what one doesn't create is acknowledging the value created by local folks = community.

it's the way I want to continue to be in the world.

Happy Scorpio Full Moon my friend.

Wed, 05/14/2014 - 09:06 | 4758388 R-502
R-502's picture

Just increase the amount of foodstamps and ...viola... no more problem buying the same amount of food. There ...problem solved.  :P 

Wed, 05/14/2014 - 10:11 | 4758745 replaceme
replaceme's picture

Replace foodstamps with minimum wage and you have a presidential campaign platform.  People will vote for you, adore you, and never understand why they're still poor.  Poor and stupid.

Wed, 05/14/2014 - 09:07 | 4758389 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I suggest food prices are excluded from the producer inflation stats. The're ya go. Problem fixed.


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