Soaring supermarket prices might not seem like a big issue for the top 10% of Americans who've enjoyed a period of asset price inflation thanks to the Federal Reserve, but for the working poor who don't own assets and are stuck in a renting society, every single price increase for food is eating away at their real wages.
Add milk to the long list of foods that are getting more expensive at supermarkets across the country. Bloomberg reports retail prices for a gallon of milk are up 26% at $3.59 since bottoming at $2.84 in July 2018.
There are several factors at work pushing milk prices higher. First, the number of dairy cows has collapsed to the lowest in a decade, which crimps output. Foreign dairy producers, such as major ones in the European Union, New Zealand, and Australia, are also experiencing declining outputs. On top of this all, the cost to feed dairy cows and operate a dairy farm is becoming more expensive thanks to soaring commodity prices, suggesting prices will continue to rise well into 2022.
For the average household, dozens of gallons of milk are purchased each year, and for the working poor, every incremental price increase adds up. But it's not just milk and dairy products that are on the rise, almost every product at the grocery store has jumped in the past year. For example, meat prices -- boneless chuck roast have risen 28% in the last year.
Much of the increases are due to the knock-on effect of rising commodity prices, labor shortages, shipping congestion, and increased transportation costs. This week, it was reported that Oreo cookies, Ritz crackers, and Sour Patch Kids are the next supermarket items to get more expensive.
John Catsimatidis, the billionaire supermarket owner of Gristedes and D'Agostino Foods, warned not too long ago that Nabisco, PepsiCo, and Coca-Cola will be raising prices in the near term. He told Fox News: "I see over 10 percent [price increase] in the next 60 days," adding that the trend will not drop "anytime soon."
The list of food and beverages experiencing price hikes goes on and on. And prices might continue to soar as the UN's Food and Agriculture Organization's global food price index hit a new high last month.
Inflation doesn't stop at the supermarket but continues at the fuel station, where gasoline prices have jumped to seven-year highs. And again, inflation is a poisonous monster slithering through the economy and also pushing shelter costs higher.
Compared with one year ago, tens of millions of Americans are allocating more of their paychecks to food, energy, and shelter. To show how inflation is causing discontent, why Dems can no longer ignore soaring prices, and how it's crushed real wages of the working poor. The infographic below pretty much sums up how Americans are feeling about the president
So add milk to the long list of items inflating away and likely moving higher in the new year. The Biden administration has to stop downplaying inflation and tackle it at its core rather than sounding like a broken record player, just like the Federal Reserve, saying that inflation is "transitory."