Posted on 03/25/2014 9:38:15 AM PDT by blam
Why Food Prices Are Surging
Matthew Boesler
Mar. 25, 2014, 12:06 PM
Since the beginning of the year, food prices have been on a tear.
In a new report, Morgan Stanley commodities analysts led by Adam Longson attribute the surge in prices to a number of factors, "from weather (in the case of sugar, soybeans and coffee) to disease (in the case of hogs) to geopolitics (wheat and corn)."
The Morgan Stanley analysts don't believe this will continue.
"To date, weather concerns in South America have proven overstated, as evidenced in the recent declines in sugar prices," they say.
"Tensions in the FSU do not appear to have disrupted grain shipments, nor do we expect them to going forward, barring further Russian incursions into Ukraine. Even disease pressures in the U.S. hog herd (though very real) should ease as we move into the warmer months."
(snip)
(Excerpt) Read more at businessinsider.com ...
Wonder why Obama approved EXPORT Terminals for natural gas ?
while NOT approving additional drilling, or fracking , on government lands especially now that power companies are relying more on natural gas ?
The law of supply and demand .. while stifleing developement of our COAL reserves (estimated to be 250 years of reerve)
since most of our electrical power has been developed by the use of coal . More supply and demand !!
We are becomming power / fuel poor at the same time the EPA demands more bio-fuels
and the cost of food is increasing through INFLATION.
We are becomming a "Bananna Republic" by government fiat and incremental over-reach !
Well I now live a few miles from DeFuniak so the lake won’t get me.
Economics contains Truths; not all Economists find those to be true.
Nestled in the latest annual report from Wal-Mart Stores Inc. is a line that underscores just how much the world’s largest general merchandise retailer and its shareholders have depended on public assistance programs in recent years.
Your money is going to the freeloading underclass. They live like kings while you work and pay taxes.
I hadn’t been in WalMart in a couple of months, was there last weekend. I noticed a lot of empty shelves. They didn’t have some of the items I was looking for.
My old decrepit 65 Willys jeep has a 10 gallon or so tank under the seat and filling it up with ethanol free is painful.
It is an 4 cylinder but with way it is geared, it might as well be a 304 v8.
No matter how high the food prices get,
those on welfare/food stamps/EBT will not feel it.
It is surprising to me that more people don’t talk about product shrinkage. We used to buy ice cream by the half gallon. Now it is 1.5 gallons. Tubes of toothpaste have shrunk. You can still find bacon in 1 lbs size but finding 12-14 oz sized is more common. Soon buying a dozen eggs will buy you 10 eggs.
The empty spots on Walmart shelves are because of food shortages. They are simply a way for them to have less inventory on hand, meaning less money tied up.
While I can appreciate that these guys usually put their money where their mouth is, riddle me this: if 'weather concerns in South America have proven overstated', what am I to make of the rumblings in Brazil of catastrophic electricity rationing due to drought?
Beyond that, it amazes me that we're not seeing any of this on the news, lest they miss the latest speculation about missing persons or airplanes.
Not because of food shortages, I meant.
> No matter how high the food prices get,
those on welfare/food stamps/EBT will not feel it.
We have had to cut WAY back on our spending because of Obama’s NWO economy where the elites get it all and throw us the crumbs if they feel like it. Spent $57 on groceries in the past week and that was for 3 people AND included toilet paper which was at least 1/5 of the bill. We are staying around $150- 200 a month and that is only 1/3 of what we used to spend...
“Gas is a fine example”
Agree. If oil was $30 a barrel gas would still be $3.00 per gallon.
Time to get those victory gardens going and get a few laying hens.
It isn't a shortage, or rather just a shortage. It is because sales have slowed to the point that having all that inventory is killing the stores.
Go to a sporting goods store like Gander Mountain or Cabelas. If you have been going there for a few years, you will notice the layout is different. Wider, and shorter, aisles, bigger gaps on the shelves, etc. All are trying to hid that there is more space and less inventory.
They do and they don’t....Looks to me as though there are various kinds of inflation rates and unless a news article or gov. info states clearly which one they’re using, it is just not clear.
http://www.bls.gov/cpi/cpiqa.htm
Has the BLS removed food or energy prices in its official measure of inflation?
No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the “core” CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI.
Most importantly, none of the prominent legislated uses of the CPI excludes food and energy. Social security and federal retirement benefits are updated each year for inflation by the All Items CPI for Urban Wage Earners and Clerical Workers (CPI-W). Individual income tax parameters and Treasury Inflation-Protected Securities (TIPS) returns are based on the All Items CPI-U.
What is Core Inflation and Why Doesn’t It Include Food and Energy?
by Tim McMahon on February 24, 2008
I frequently receive this question in one form or another:
Why doesn’t the government consider food and energy, and just tracks core inflation?
The core inflation rate is frequently quoted in the popular press and this gives the general public the impression that the “government” doesn’t care about (or track) the rise in the prices of food and energy.
Actually this isn’t true. The core inflation rate is simply a component of the overall inflation rate. It is used by economists because often seasonal factors will skew the inflation rate.
For instance a drought might cause fruit crops to fail, causing fruit prices to rise. But this rise actually has nothing to do with inflation (i.e. price inflation caused by an increase in the money supply). It is simply a result of the forces of nature.
Another example of forces of nature causing price increases is when a hurricane causes refineries or drilling rigs to shut down. This might cause a temporary decrease in oil supply and if supplies are tight it could result in a temporary increase in oil prices.
Economists want to eliminate this volatility from their calculations and so they use the “core” inflation rate to eliminate the two most volatile components from the calculation.
And so for some reason when “cub” reporters are assigned to report on inflation they choose the “core” since it sounds cool or something and people get the idea that the government has stopped tracking the entire range of goods and is only tracking the “core” inflation rate.
But I can assure you that the Bureau of Labor Statistics is still tracking about 10,000 different items every month and it publishes this information as the CPI-U or Consumer Price Index for all Urban consumers. This is used in calculating what is commonly called the “Inflation Rate“.
This is the number that pertains more to the average consumer because it more closely resembles what you might actually spend. As you might guess since it includes 10,000 different items, some of them are food and some are energy. It also includes clothing, beverages, rent, recreation, medical care and even some strange things like bedroom furniture, college tuition, postage, telephone services, and computer software.
Obviously, you aren’t going to be buying bedroom furniture and computer software every month so your particular inflation rate will be somewhat different than the one calculated by the government but the numbers are weighted based upon how often the average consumer buys these items. So at least you can rest easy knowing that the two things that everyone needs (food and energy) has been included and is actually weighted much more heavily in the final calculation than bedroom furniture.
How about Canada had such a big harvest of grain last year that they still have not gotten it all to market yet.
You got that right! Food prices have gone up, regardless of if folks have done what you have done or even those on EBT support.
This response is “out of time” meaning I’m late to the party, as usual, but I’ve had the same concern that shortages are already in some form, with us.
We’ve noticed the same problem at both the Walmart grocery and the big chain grocery we shop at. Walmart tries to hide the inventory item by filling whole rows of an isle with the same product. But the variety is definitely not there. I’ve learned not to fall in love with any particular item because they may not have that item for months at a time. But, I’m also seeing what appears to be massive stocking up by some customers; people will take 20 or 30 cans of soup. I’m thinking....”yea, no, nobody throws Soup parties.”
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