Food price inflation isn't theoretical anymore

|
Ann Hermes / The Christian Science Monitor / File
Boston resident Daniel Kemp watches his grocery bill as DeLuca's Market employee, Fabian Acosta, rings up his purchases, in this 2009 file photo from Boston, Mass. "Everybody's noticed you're spending ten dollars or more on groceries," Kemp said. Staples have risen: chuck roast is up 13 percent to $4 per pound, whole milk is up 10 percent to $3.28 a gallon, and eggs are up 7 percent to $1.75 a dozen, according to the Bureau of Labor Statistics.

Hate to say I told you so, but this one could be spotted a mile away. And some of us did. The law of unintended consequences is in full effect as the food price inflation (aka Agflation) I feared is finally here. We're not talking out-of-control price hikes at this point - but the trend is the trend and our monetary policy is definitely exacerbating it.

From the Wall Street Journal:

Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald's Corp., Kellogg Co. and Kroger Co. have begun to signal that they'll try to make consumers shoulder more of the higher costs for ingredients.

Our officials are really into CPI as their inflation measure, which is a shame because it doesn't actually take into account, well, inflation. "Inflation ex-food and energy" is the most oxymoronic phrase in the economic glossary. Here's the troof:

Food prices are rising faster than overall inflation. The consumer price index for all items minus food and energy rose 0.8% over the year to September, the lowest 12-month increase since March 1961, the Bureau of Labor Statistics said. The food index rose 1.4%, however. The U.S. Agricultural Department is predicting overall food inflation of about 2% to 3% next year.

My raise rates to 1% call is looking better and better. Meanwhile, the Fed pumps more cash to the developing world - our new competitors for protein and grains.

Sources:

Food Sellers Grit Teeth, Raise Prices (WSJ)

Read Also:

Raise Rates, Cowards (TRB)

Farmer Brown Wuz Right, Food Prices Exploding (TRB)

Signs of Agflation Hit Egypt (TRB)

Add/view comments on this post.

------------------------------

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.

You've read 3 of 3 free articles. Subscribe to continue.
QR Code to Food price inflation isn't theoretical anymore
Read this article in
https://www.csmonitor.com/Business/The-Reformed-Broker/2010/1108/Food-price-inflation-isn-t-theoretical-anymore
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe
CSM logo

Why is Christian Science in our name?

Our name is about honesty. The Monitor is owned by The Christian Science Church, and we’ve always been transparent about that.

The Church publishes the Monitor because it sees good journalism as vital to progress in the world. Since 1908, we’ve aimed “to injure no man, but to bless all mankind,” as our founder, Mary Baker Eddy, put it.

Here, you’ll find award-winning journalism not driven by commercial influences – a news organization that takes seriously its mission to uplift the world by seeking solutions and finding reasons for credible hope.

Explore values journalism About us