Tuesday, April 1, 2014

More about food price inflation

Last week I mentioned in passing that 'US spot foodstuff prices have so far risen 19% in 2014'.  In his latest Woodpile Report, Ol' Remus has more on what's happening to food costs in the USA.

Given the drought in California and southwestern states, the PED viral infection killing off piglets by the millions, the diversion of corn into fuel extender duty, the smallest cattle herd in more than sixty years, the decline in the bee population, et alia; it all adds up to a sound bet: food prices will continue to rise.

Since the first of the year pork is up 45%, corn and wheat are up 14%, coffee is up 42%, and cheese is up 21%. All grain-fed livestock, chicken included, are up and so are eggs and dairy products. Vegetables are taking out all time highs. Even the determinedly inattentive have to notice the weekly increase in their grocery bill. It's easy to miss while shopping, granted, the rise in prices is well disguised, commonly like this:
  1. Smaller quantity but in the same size package and same price as before
  2. Smaller quantity yet, in a smaller package, at same price
  3. Same small quantity and package, but of lower quality, at same price
  4. Same small quantity and package, same low quality, but higher price
  5. Even smaller quantity and package, same or lower quality and same price
  6. Repeat 4 and 5
Coffee is a one example. The standard three-pound can become a more or less two-pound can in small steps. Quality is being lowered by replacing Arabica with Robusta—the swill of coffeedom, but cheap and hardy. Less quantity is the only way out for some items, those where quality isn't a useful variable. The twelve-ounce package of bacon for example, which is gradually replacing the standard one-pound package. Perhaps there'll come a day when it's sold by the strip.

There's more at the link (scroll down to the section headed 'Food Prices').  Food for thought indeed, as are some concrete examples of shrinking food quantities and/or containers provided last week by Planck's Constant.

However, since our political and administrative lords and masters have decided, in their all-too-finite wisdom, that food prices should not be included in the calculation of the inflation rate, you may rest assured that all those whose primary income is calculated on the basis of the 'official' rate of inflation (e.g. Social Security, inflation-linked pensions or annuities, etc.) will not receive any increase in their stipend(s) as a result of higher food prices.  They'll have a choice:  pay other bills and starve, or eat and be sued for non-payment of those other bills.



bernie said...

I believe there are a number of food items used to calculate the CPI but obviously have little impact since the official inflation rate is 1.1%, despite all the smaller packages, thinner and shorter sheets of toilet paper, lower quality coffee beans, smaller cans of tuna, etc.

Whoever is doing the shopping for the consumer price index is carelessly throwing cans and packages of selcted items into the shopping cart without looking. Or, we have workers there who are gaming the numbers to make Obama look good, in the same way that the IRS stonewalled tea-party applicants so that they could not support anti-Obama candidates.

Again, thanks for linking.

Comrade Misfit said...

Ah,m the Magical Grocery Shrink Ray that has reduced a pound of coffee down to 11.5 ounces and a half-gallon of ice cream to 1.5 quarts.