Breakfast Inflation is Either Wonderful or Terrible
By John Mauldin
By John F. Mauldin, Chairman, Mauldin Economics
Is inflation making breakfast more or less affordable? It depends on what you order.
Recently my Mauldin Economics colleague, Tony Sagami, showed how basic grocery staples are rising in price. His evidence: the Wisconsin Farm Bureau’s semiannual “Marketbasket” survey.
The survey shows prices for a basic grocery list rising 2.7% in the last year.
Not every item rose, however. The full breakdown since last spring is tells us more.
The six-month price changes span a wide range. Eggs jumped 72% and milk dropped 13%. Several other items had double-digit percentage changes.
The list illustrates how differently we can perceive inflation.
A hearty-breakfast devotee who ate eggs (up 72%) and toast (white bread +25%) saw very high breakfast inflation.
Someone who liked their daily Cheerios (down 6%) and milk (down 13%) had a different experience.
Other goods and services have similar differences. That’s why “average” CPI inflation never precisely reflects our own individual experiences. Few people are exactly average. We all spend our money differently.
No surprise, then, that some of us see high inflation while others don’t.
This article is based on John Mauldin’s Thoughts from the Frontline newsletter of Nov. 1, 2015. You can read the full issue here.
I wonder if they take into account the downsizing of many packaged goods?
I recently saw them selling 18 packs of beer.
Dutchman,
Doubt it, but great observation. Companies are reducing the amount in the bag and reducing the container sizes, but charging the same amount. Lotta slight-of-hand going on. I even witnessed the effect on my kids’ Halloween candy — the Reece’s Peanut Butter Cups were friggin’ smaller! Jerks!
$4.51 for a pound of bacon. Ridiculous.
Bacon is from cheap-ass, fatty pork bellies. Then again, 65% of Americans would support bacon as “America’s Food.” Supply, meet demand.
Actual picture of SSS’ DESIRED, rather than actual, daily intake of bacon. Heh.
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Ohhhhhhhh, what a magnificent picture.
@Dutchman, my daughter and I were cleaning out my late brother-in-law’s house the other day and found an actual 5 pound bag of sugar. I told my daughter she should keep the bag for posterity.
As for the article, sure, we all spend our money differently so there’s no average. But if anyone actually thinks “breakfast inflation” is wonderful, I have some waterfront property to sell ya. Cheap!
Drought has reduced the number of cattle, PEDv has reduced pigs, and bird flu has reduced chickens and turkeys.
Any animal related food products are going to remain high for quite some time as the droughts and diseases are overcome and numbers rebuilt.