Food costs going up.

Discussion in 'Economics' started by peilthetraveler, Apr 22, 2010.

  1. http://www.marketwatch.com/story/wh...igher-food-prices-2010-04-22?siteid=rss&rss=1

    Most interesting part of this article is...

    "The big story in the March PPI was wholesale food prices, which rose 2.4%, matching the biggest gain in 26 years. Prices of fresh and dried vegetables soared 49.3%, the most in 16 years."

    So prices of fresh vegetables rose 49%. Now most products use some kind of vegetable to make whatever it is they make, So I think we will be seeing some massive inflation soon.

    Another part of the article...

    "Federal Reserve officials have largely ignored the PPI, saying that inflation at the more-important consumer level is expected to be modest for the next few years, given the considerable slack in the economy that saps the ability to raise prices at will"

    Since we all know that whatever the federal reserve says is NEVER true, this is just more evidence we are going to have high inflation in the very near future.
     
  2. Fortunately, the Fed at this point is correct. I work in the CPG industry. We make over 50 brands you find in your local grocery store. I am in industry peer groups that discuss prices, margin squeezing, costs, etc.

    We're seeing dis inflationary pressures from retailers. They are lowering prices, forcing manufacturers to cut margins. The producer is getting squeezed in order to lure the consumer back into a given chain. Walmart even announced a reduction of over 10,000 items in a massive roll-back initiative. And since most major retailer chains comp-shop walmart, well...you can figure it out from there.
     
  3. i don't think it is the market reactions peil is afraid of. i think it is the ability to produce. regardless of the activities of walmart etc if there is shortages it will rise. i think this will happen in the future perhaps not in the short term but it will happen.
     
  4. Mark-to-market valuation of derivatives and real estate will offset that with deflation. :eek: :( :D
     
  5. I was just in a discount grocery store today. I noticed two things. One was that some of the veggies were a little smaller than they normally are. The other was the price per ear of corn. A single ear was 49 cents. This time last year, the same store was selling it for 25 cents each.

    Anyway...it was interesting what you said. But if its true, that they are forcing manufacturers to cut margins, that means more unemployement, which means more government handouts.

    Also coincidently I went to wal-mart a few days ago. For the first time i saw a few empty shelves. So even if retailers cut and cut and they cant keep their stores shelves stocked, that will cause regular people to go and and sell these things at a higher price. If walmart sells a widget for 10 bucks and I really want a widget and they have none on their store shelves, Im going to ebay to find one. There I get one for $15. Then when the widgets finally get stocked again in walmart, Im going to buy them all and resell on ebay too. When retailers try to force manufacturers to cut costs so they can lower prices, its quite possible that people will buy that stuff just to resell it. People will created a higher demand for the widgets just to resell.

    Not saying that it would happen for sure, but its very possible.
     
  6. clacy

    clacy

    Peil, what is it like being constantly terrified of massive inflation? I realize it's always a possibility and has happened to many counties throughout history, but you inflationists are constantly beating the drum and pointing to the sky falling.

    My point is, can it be worth all of the heartache involved?

    Being a chicken little can't be that much fun. I'm not advocating burying your head in the sand, not saving, not being prepared, etc. But this kind of worry has to take a toll on you, IMO.
     
  7. Speaking of vegetables and fruits.

    NY state among a few others states want to add a sugar tax on drinks to fight obesity. That's the line anyways.

    When was the last time anyone seen a commercial for an apple?
     
  8. Vas62

    Vas62

    And another idiot wants to regulate salt intake.
    Maybe tax on salt is next ? :p
     
  9. 377OHMS

    377OHMS

    Don't you people have Trader Joe's?
     
    #10     Apr 22, 2010