Eric deCarbonnel
April 25, 2010
PRnewswire reports that US Food Inflation Spiraling Out of Control.
(emphasis mine)
U.S. Food Inflation Spiraling Out of Control
FORT LEE, N.J., April 22 /PRNewswire/ — The National Inflation Association today issued the following food inflation alert to its http://inflation.us members:
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.
My reaction: US food inflation is spiraling out of control.
1) Food prices for the month rose by 2.4% in March, the largest jump in over 26 years.
2) Some of the startling year-over-year food price increases 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%
dairy products up 9.7%
A major breakout in food inflation could be imminent
1) The PPI foreshadows price increases that will later occur in the retail sector.
2) Many retailers are currently reluctant to pass along rising prices to consumers, but they will soon be forced to do so to avoid going out of business.
3) Food stamp usage in the U.S. has now increased for 14 consecutive months.
4) The US government is now paying out more to Americans in benefits than it collects in taxes.
No Economic Recovery
1) Rising food and gasoline prices accounted for 58% of February’s year-over-year 3.85% rise in retail sales.
2) As inflation accelerates, all increases in U.S. retail sales this year will be entirely due to inflation.
Conclusion: Things are going to get ugly in the US this summer. See *****2010 Food Crisis for Dummies***** for details.
