April 26, 2010

food inflation

This is not loaves and fishes inflating:

U.S. Food Inflation Spiraling Out of Control. From here

The Bureau of Labor Statistics (BLS) today released their Producer Price Index (PPI) report for March 2010 and the latest numbers are shocking. Food prices for the month rose by 2.4%, its sixth consecutive monthly increase and the largest jump in over 26 years. NIA believes that a major breakout in food inflation could be imminent, similar to what is currently being experienced in India.

Some of the startling food price increases on a year-over-year basis include, fresh and dry vegetables up 56.1%, fresh fruits and melons up 28.8%, eggs for fresh use up 33.6%, pork up 19.1%, beef and veal up 10.7% and dairy products up 9.7%. On October 30th, 2009, NIA predicted that inflation would appear next in food and agriculture, but we never anticipated that it would spiral so far out of control this quickly.

The PPI foreshadows price increases that will later occur in the retail sector. With U-6 unemployment rising last month to 16.9%, many retailers are currently reluctant to pass along rising prices to consumers, but they will soon be forced to do so if they want to avoid reporting huge losses to shareholders.

Food stamp usage in the U.S. has now increased for 14 consecutive months. There are now 39.4 million Americans on food stamps, up 22.4% from one year ago. The U.S. government is now paying out more to Americans in benefits than it collects in taxes. As food inflation continues to surge, our country will soon have no choice but to cut back on food stamps and other entitlement programs.

Most financial experts in the mainstream media are proclaiming that the recession is over and inflation is not a problem in the U.S. Unfortunately, they fail to realize that rising food and gasoline prices accounted for 58% of February's year-over-year 3.85% rise in retail sales. NIA believes price inflation is beginning to accelerate in many areas of the economy besides food and energy, and all increases in U.S. retail sales this year will be entirely due to inflation.


mutron3k said...

Good to see. Historically food was a larger percentage of household expenses, and maybe small-scale farmers can make a living if food is more valuable.
I would also guess that as oil and other inputs (fertilizer) get more expensive and pesiticides, herbicides, etc. loose their effectiveness, the playing field will be more level for organic farming.

anne said...

Vudu, I appreciate your point and hope pesonally the coming hyperinflation of food will encourage people to grow more of their own food and consequently eat more nutritiously, more intimately.

I'll find no satisfaction in real food becoming out of reach for most people (let them eat twinkies!) And how long will this last - will it crash down again?
Letting farmers and consumers face the deep consequences of an out of control corportism isn't a sensible vision - developing systems that stabalize fair livlihood and accessibility will require extricating food from the current political model.