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Producer Prices Surge Most In Over Four Years As BLS Discovers Food Inflation
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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Theres no inflation, Lagarde told us so! If anything we have lowflation she says!!!
AHHHHHHH!!!
Were so fucked, but at least the cartel caps in gold have been failing miserably. Look at that! 1310 approaches!
Hmmm...my 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
It's the weather.. Again.
Wait till the dolla dies and they all come crashing back ashore.
Got junk silver?
pods
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???
The Fed wants to tighten so now there is inflation.
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.
Shameless promotion:
Painted Mountain Corn Seed -Heirloom, Non-GMO, Fukashima-Free. Grows where no other corn will grow for liberty-minded folk.
rockymountaincorn.com
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.
And the WSJ sez today Fannie and Freddie ( in bankrupcy?) lowering the credit standards for mortgages.....now we can starve in our McMansions, just like washing your hair, wet, scrub, wash and repeat.......
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.
Net the bullshit to which you have noted....it 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.
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.
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'
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%.
"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.
No, they will come raid your kitchen, then go starve in a ditch.
It's walking and quacking like stagflation
Venezuela time!
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.
What is amazing is how the bond rates are falling...all over the world...how is that happeing????
Wages wages wages. Don't forget that. You don't get interest rates and gold and inflation spiraling out of control without wage inflation.
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.
Don't worry, Aunty Ponzi Munchkin will just print more money. Problem solved. Markets rally.
Chained PPI...just find a substitute for food and problem solved. You're welcome.
Soylent Green?
Defecake. The new name in snack foods.
DEFLATION AVERTED! JOB WELL DONE! UP TO THE NEXT!!
Obama is really doing his best he....
If you want your inflation, you can keep your inflation.
I guess we have hit Peak smaller packaging !!!!
It's all part of the "fight obesity" programm... it's working...
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.
this.
"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. . .
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.
Liberating.
Chinese purchase of Smithfield looking like a pretty good move about now.
Dump those paper dollars for a productive asset from american debt slaves.
'Productive asset from american debt slaves'....about the only thing I can think of is making soap from their liposuction fat?
Biodiesel.
don't lye to us pods
;~)
"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.
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:
http://polyfaceyum.com/shop/index.php?main_page=product_info&products_id...
imho, worth the silver dollar if you got some woods.
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)
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)
Diatomecous Earth.
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!
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.
http://thecontraryfarmer.wordpress.com/2014/05/14/will-society-spurn-ani...
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!
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.
Just increase the amount of foodstamps and ...viola... no more problem buying the same amount of food. There ...problem solved. :P
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.
I suggest food prices are excluded from the producer inflation stats. The're ya go. Problem fixed.
/s
Surprise, surprise,surprise
Say it using the voice of Gomer Pyle.
In April, a 9.4-percent jump in prices for slaughter chickens
But this expensive chicken tasted better - so, hedonically adjusted, there was no inflation
All set to launch equities higher I presume.
Let me remind you guys again. Rising costs of food and energy are not an inflationary event. For that matter we can throw out health care, student loans, rent, and utilities too. The only time we have inflation is when your non-hedonically adjusted iPoop or flatscreen teevee goes up in price. Sheesh, what a bunch of rubes.
SNAP/EBT
Subject for revision.
http://www.fns.usda.gov/pd/supplemental-nutrition-assistance-program-snap
So I was at my local Giant Eagle grocery store. Had the in laws in town, and was told to get some crackers and cheese to nibble on before dinner. I am in the open air cheese display and pick out a small gorgonzola and cranberry spread (4 oz). Its called a torta or some shit. It had no price listed but I just assumed it would be $6.99 like it was last year. I get to the register and booooom, $12.99! I asked the cashier if it was a joke, she said it does seem like a lot for that. Trying not to be a prick I just said fuck it ring it, there's a long line and its not your fault. Afterwards I went and got a price check to confirm, and it was the right price. I returned it and told the manager, these prices are insane. He simply said "I know".
Yes, but did it say "New And Improved" on it...well there you go...Moar for New And Improved.
Well, you see, they simply chose to keep it at 4oz rather than keep the same packaging and reduce it to 1.5oz, or (more likely) what they did is jack up the price while mixing in filler to keep the volume. Simple really, as long as they all do it, the consumer just pays more for less, and everyone gets to keep claiming increased profits, increased revenue growth and increased consumer confidence/spending, etc. etc.
Meanwhile, for CPI, they simply ignore things like this as much as possible and when it can't be ignored, they just make up data. Why? Because many many many spending items in he budget are linked to CPI. If they allowed CPI to reflect reality, the budget would be even more out of control as they met obligations. And that's bad for political careers. Simple stuff really.
And the best part of all, the best part, is the material input cost increases are a mere fraction of the changes being made. Remember when ice cream came in half-gallon containers? Oops, not anymore. Ditto goes for just about everything. Burger King, McDonalds, over here it's all 50%+ soy filler at this point, yet, sure enough, they keep jacking prices, while beef prices have actually stayed relatively stable (up by about 30 cents per pound in the last year). It's due to the demand for "infinite growth", once actual growth has faded and the markets have been saturated, the only options are to cut corners to boost the growth figures... or risk complete collapse of the stock prices. My policy is pretty simple, when foods-of-convenience get jacked up, I just stop going there and make it myself, because it's stupidly cheap for just about everything. Only exceptions being when the capital investment required for certain dishes (cooking appliances and special widgets) far exceeds any true benefit in terms of cost or space occupied by an underused item, then it's worth it.
I get tallow from the butcher for $2 a kilo. Which makes the most amazing dishes. I buy massive amounts of produce when in season and cheap and then dehydrate, can, pickle, jam or ferment them and then enjoy it year-round for dirt cheap. I don't fall for the "organic" scam, I just get my stuff at market, from sellers who I trust and have trusted for years (and even seen the local farms they source from). The supermarket however... suffering from the same problem of greed as you see in the west. Mushrooms: $10 a kilo (and they go bad 2 days later), market price: $2 a kilo and they are fresh fresh fresh. Here's a hint: if it's in the supermarket, it's not fresh, it's not cheap and it's not safe... I don't care if it's walmart, costco or whole foods, it's all bullshit. But the really hilarious thing is that over here, buying it in the morning markets (akin to farmers markets), is cheap. Farmers markets in the US have been yuppified to the point where there's just no point.
Here's the difference. When I go to the market, I have many many many sellers all next to each other selling the same things. If I don't like their attitude, I can walk 2 more steps and get it from someone else. I can pick how fresh everything I get is, I have choices, and these choices result in lower prices, which can, even then, be bargained on. When you go to a supermarket, what you are really saying is "here's my money, fill me with 'food', making decisions is too hard". And they'll give you the lowest grade crap they can get away with for the most they can possibly charge.
There's always the 99 Cent Store. 16oz hydrogen peroxide 99 cents or go to CVS: 24oz for $1.99 (50% more 'free' it says on the CVS bottle).
Eh, 500ml (about 17oz) here goes for about 30 cents.
the asian morning markets blow the american farmers markets away.
but then you can't have the kiddies see a freshly slaughtered pig hanging around to ruin their appetite.
question: are any of the farmers over there having difficulties with the soil and/or water?
Most produce where we are comes from Yanqing district or neighboring Hebei (very close to the Beijing city limits). It's a stupidly clean place pretty much untouched by industry. Water's not a problem, soil's not a problem. Of course, there are also imports from basically every country in the world as well. Grapefruit from South Africa and Israel, loads of stuff from SEA and South America, Australia for dairy mostly, and now and again some treats from Europe (german bread and russian ice cream... so wrong but so right). Not so much from the US though... turns out people don't like buying GMO crap.
I took a baggie to the grocery store, the price was higher than the time before, the old man asked me why was it four, i replied, cause after 3 they keep tabs on your behavior.
this is why they don't put the prices on the products any longer, so that most folks who purchase baskets/carts-full have no idea what they've paid per product unless they sit down with the receipt. . . the prices can be adjusted & re-adjusted each time the product is stocked,
and we all know they rarely go down.
Coming soon (and already found around here and there, just look for them) are digital price displays, not just for the gas station sign or your local McDonald's menu anymore. They will enable prices to be changed quickly, on the fly, to better server you in the coming era of hyperinflation. Just like the old "warm beer economy" of Weimar Germany (where you bought all the beers you were going to drink when you walked into the beer hall, because the price would go up in the time it took you to drink one), prices for goods will soon read like a stock ticker, going up in the time it takes you to walk to the register with them.
seriously going triple long goats after reading that comment.
pssst.
freshly made goat cheese, Frangelico, rolled in chopped hazelnuts. . .
how about Chinese Chestnuts grown in your backyard as a substitute?
could give them a try - though we've been lucky to get gleaned hazelnuts apres harvesters moved on through. . .
but we definitely keep working with variants and substitutes, as special-treat stuff needs re-thinking going forward, eh!
yeah, well, who the f*** cares about this inflation crap. as long as i can keep buying my idevices, big screens and shop at Krogers with my food stamps, get my Obamycare, I'm just fine and dandy.
Does this officially mean that the Fed has reached its 2% mandate?
NO -
In a strange twist - high food and energy inflation helps keep the price of other shit lower
People only have so much to spend - so if you must buy food and put gas in your car you will cut back someplace else - so the companies that sell other shit have a hard time increasing prices.
The inflation numbers the FED uses exclude food & energy.
So this gives the FED the ability to keep rates lower longer.
Learning how to cook and fixing meals at home is a revolutionary act. It improves food quality while minimizing unit costs. Growing food is even better. Turning unfinished food commodities into finished products is also useful. For example, roasting coffee beans, brewing beer, making wine or whiskey. It has the additional benefit of being fun. World class african coffees can be had for 6.50 a pound. Roasting takes twenty minutes a pound- and it's not burnt like Starcrap. Beer? 3 bucks a six pack. Wine, kits produce 3 dollar wine.
More important, you diminish the results for corporate slop providers.
A man after my own heart. Except I don't roast coffee.
given the dilution of quality ingredients inherent in the corporate model, you can also avoid the inevitable road to ill-health/disease sourcing nutition from The Company Store brings. . .
and yeah, an old popcorn machine (yard sales & thrift stores) and some green coffee beans. . . and there's always a cast iron skillet back-up, heh - coffee, get it while you can. . .
mmm.
Quantities, and quality are falling, prices are rising. Combination is way more than 3%
My hot dog is mostly bread nowadays with something that looks more like a Slim Jim buried in mustard.
Nothing will change until America is both thin and hungry.
I think the Bullshit Lying Scumbags missed the inflation in food by a factor of 10 on an annual basis.
CUNTS!
In 2011 a quart of Haagen Dazs Vanilla was $2.50. By the time we moved to Asia in late 2012, a "quart" (downsized to 28 oz) of Dazs Vanilla was $3.50 + (still was $6 for a 1/2 gallon at Costco, if I remember correctly). I just looked online, and a 14 oz. container of Dasz Vanilla is now $5 at Walgreens. By my calculations, that is an ~350% increase, in 3 years.
I remember food shopping before we left, and I was amazed at the prices on some items (a grapefruit for $1.5?!?) , and shocked by price increases on others.
After they did the TARP bailout, I told my brother that "things are going to get damn expensive there." It is getting more expensive here in Asia, as well.
Guess what guys! These high prices are here to stay! You think they are going to reduce prices, given their input and carrying costs, and the continued money printing?
FUBAR system! Something's gotta give.... prepare yourselves!
To eat or not to eat, that is the question.
compare ingredients over time, that's where the real shocks get ingested. . .
I had the same experience, we spend most of 2012 in Thailand, coming back was total sticker shock. Things are going up there too, but the US consumer is really getting reamed -- not just on food, on everthing. About the only thing that is a little cheaper here is gas.
energy cost work into food production, who woulda known.
This suggests that production costs are rising, based on inputs of fertilizer, fuel, labor and processing. Overall it is the first return to
conumer consumption and faith in jobs, not good jobs but work. This crowds out other consumption. Or paying for other consumption.
The Fed has not figured what this means into its future plans, but expect NO rate increases soon. There is Hobson's Choice: do nothing no way out of this swamp. We knew that with all the padding of economic information was useless, but we also knew the Fed is isolated and clueless. We are in trouble. Serious political trouble and more hardship in the voters.
Last year I could buy limes for 2 or 3 for a dollar. In the store the other day they were $1.68 each.