These deflationary trends sure are killing us. Ben Bernanke has the balls to sit in front of Congress this week and declare inflation under control. I keep being told by the MSM that home prices are rising. I’m told by the MSM that rents are soaring. The charts below prove that energy and food prices are skyrocketing. But, somehow the CPI says there is no inflation. Maybe the BLS has assumed you’ve switched from steak to hamburger to eating stink bugs, therefore there has been no food inflation. The charts below are for one freaking month.
OIL
HEATING OIL
NATURAL GAS
UNLEADED GAS
CORN
SOYBEANS
WHEAT
COFFEE
SUGAR
Your burger is about to get pricier
By Hibah Yousuf @CNNMoneyInvestJuly 18, 2012: 10:47 AM ET
If the Midwest drought lingers and the high cost of corn continues to weigh on farmers, consumers could face an increase as high as 10% for fresh protein at the grocery store.
NEW YORK (CNNMoney) — As the widespread drought continues to damage grain crops across the Midwest, consumers could soon be facing steeper bills at the grocery store.
“We haven’t seen any rain at all, and based on that, food inflation is definitely a real threat,” said Phil Flynn, senior energy analyst at the Price Futures Group in Chicago.
The dry, scorching heat has had the most severe impact on corn crops.
Nearly 40% of the corn planted across the nation is in poor or very poor condition, compared to just 11% at this time last year, according to to the U.S. Department of Agriculture
The drought and the fear that conditions could worsen, further pressuring crop yields, has triggered a 50% spike in the prices of corn futures over the past month to $7.79 per bushel.
On average, food prices typically rise 1% overall for every 50% jump in corn prices, said Richard Volpe, an economist for the Economic Research Service of the U.S. Department of Agriculture, but particular categories of food are impacted more severely.
Analysts and economists predict that prices of beef, pork and poultry will jump the most, as corn is the main feedstock for chicken, cattle and pigs.
Prior to the drought, analysts had predicted a 4% to 6% rise in retail beef prices, said Michael Miller, senior vice president of global research for the National Cattlemen’s Beef Association.
But if the drought lingers and the high cost of corn continues to weigh on farmers, consumers could face an increase as high as 10% for fresh protein at the grocery store, said Miller. That means beef prices could jump from an average of $4.35 per pound in 2011 to an average of nearly $4.80 per pound this year.
The true extent of the increases won’t be known until the crops are harvested later this year, and prices won’t jump overnight of course. In fact, consumers will likely face the trickle down effect toward the end of this year, and into the start of 2013, Miller added.
“We’re in one of those situations where everyone is watching the weather and corn prices from the edge of their seats,” said Miller. “This is the first time in a long time that we’ve had a drought this significant in the Corn Belt, and that’s why the market is so nervous.”
Weather experts aren’t at all optimistic in their forecasts. According to AccuWeather.com senior meteorologist Alex Sosonowski, “the combination of too much hit and too little rain moving forward into the middle of August will prove to be too much for corn to take.”
While the price of meat and milk products will likely rise as a result of higher corn prices, other products, like a box of corn flakes, will remain relatively steady, according to the USDA’s Economic Research Service, as prices for those types of foods are more heavily impacted by packaging, processing, advertising, and transportation. In fact, a 49% increase in corn prices only raises the price of a box of corn flakes by about 0.5%
ThePessimisticChemist says:
In a normal economy this drought would be excellent for my company, and our profit sharing would ensure that it would be excellent for me as well. Too bad I’m so worried about the future of this country that I don’t dare begin the “American dream” (house, kids, car).
*toasts* Here’s to living in your parent’s basement until age 30!
I’d feel bad, but apparently all of my friends but two are doing the same, and of those two one works for the Railroad and the other is facing bankruptcy (contractor).
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19th July 2012 at 1:44 pm
Administrator says:
TPC
Are your parents laid back? If I had to live with my mother again, I might just end it all. A week in Wildwood is about all I can bear.
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19th July 2012 at 1:53 pm
ThePessimisticChemist says:
@Admin -
No. My parents divorced when I was young so the closest I’ve ever lived to my father is a 23 hour drive (he’s a marine, and I live in Missouri). I haven’t spoken to my mother since march 31st and I’d sooner enlist (thats right, two degrees and I’d enlist) before I would ask her for anything, let alone to move back in.
We are living with my in laws. They are good people. Typically boomers when it comes to spending, but still good people.
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19th July 2012 at 2:18 pm
ONE MONTH « Silver For The People – The Blog says:
[...] google_color_bg = ""; google_color_text = ""; google_color_url = ""; google_ui_features = "rc:0"; theburningplatform.com / July 19, 2012These deflationary trends sure are killing us. Ben Bernanke has the balls to sit in [...]
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19th July 2012 at 3:11 pm
Bob says:
“To the moon, Alice!” — Ralph Kramden
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19th July 2012 at 3:43 pm
Administrator says:
Colma
Time to start brewing your own pot of coffee in the morning like Admin.
Well-loved. Like or Dislike:
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19th July 2012 at 4:18 pm
IndenturedServant says:
Damn! I knew inflation was bad but ……..damn! Looks like the very best investment you can make right now is in non-perishable foods, toiletries and other durable supplies.
I just read the revolution takes time article and then this one. I literally feel sick to my stomach.
For you preppers, don’t forget to lay in a good supply of trash bags. Also consider how and where you are going to store them when full. Saw a headline about a CA city so broke that they cannot continue trash pickup. Add bleach and iodophor to the list. Methinks sanitation might become a big issue.
I hate this shit!
I_S
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19th July 2012 at 5:53 pm
Bullock says:
No Inflation? I was going through receipts today. In 2006 I paid $310 for a truck tire. Today the same tire is $475. I do know that all the new vehicles being put on the road in China and other emerging markets has caused a high demand for rubber. But I cannot raise my rates high enough to offset the cost increase. And fuel, I don’t even need to explain that to anyone here. And all the parts for class 8 trucks have gone up a lot over the past 5 years, more so then in previous years.
It’s not much fun being the owner of a small business like it use to be.
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19th July 2012 at 6:55 pm
DaveL says:
I know one thing that hasn’t risen much in the last few years.
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19th July 2012 at 9:55 pm