In the past year, bacon went up 10%, fruit 6%, and just 0.2 and 0.3 for cereal and for coffee (but sugar is up over 3% because its ocean-freight transported). Consumer price index went up 4.2% yoy in April.

Corn is up 50%, which is 96% of what farmed animals eat in the US, which exports to the world. China is importing a ton to try to build up its hog supply again, while other countries like Brazil and Argentina have recently had drought (which also narrows rivers and reduces transport ability). Also, 10% of US gas is ethanol. Shipping costs are up, too, because of the labor issue. As you see, a lot of the costs in these products involve labor costs.

Restaurant meals are up 4% in cost. Takeout trays are yet another part of this--prices went up after a Texas storm took out a factory.

Some economists talk about 'wage price spirals,' where both wages and prices go up in a relationship. It was an issue in the 70s. The Fed says inflation is transitory.

This was an idea from Wall Street Journal.

#Corn #Commodities #Inflation

The reasons include China buying more because the country is rebuilding its hog herd after major losses in 2019 and last winter (African Swine Fever); draught in Brazil and ongoing dry conditions in the U.S (two major suppliers); and traders trying to hedge inflationary risks.

The robust Chinese demand is expected to continue for 2-4 years. Additionally, rising incomes in developing countries could keep food prices moving upward.

There isn't much alternative (such as rice and wheat) to feeding livestock good grains (corn and soy beans) when a livestock economy is focused on maximizing gains and quality, as China's is.

Offsetting factors to inflation in food prices have started to be seen in more elastic demand factors, such as Chinese animal protein demand, where indications are consumers are starting to pull back due to prices. Also, the supply side, if robust enough, could put downward pressure on prices. We'll see how robust U.S. production turns out to be this year in the June Acerage Report, as the U.S. is still planting this years crops.

Rice prices aren't up in the same way because stocks have been built up over the past few years.

#Food #Commodities