CTH has covered the origin of food inflation since we first raised the alarms in the spring of 2020. A confluence of events starting with the fracturing of the food supply chain (shutting down restaurants, hospitality venues, schools, cafeterias, etc), created the initial major problem. Consumer Packaged Goods (CPG) sold at retail stores could not keep up with demand after 50% of the food supply system was shut down.
Within the U.S. retail food supply chain (350+ million people), manufacturing CPG products relies on a system of staying one to two harvest cycles ahead of demand. However, when restaurants and fresh food venues were closed, very quickly frozen, bulk stored and siloed U.S. food storage systems, the storage needed for CPG products, were emptied.
Long after the time when all food distribution was reopened, the shortages of CPG products continued. You saw the result with empty shelves at the supermarket. It takes a long time (years) for those inventories to refill.
We warned of this in 2020 and then followed the predictable outcome in 2021 and 2022.
When Joe Biden then shut down the U.S. energy production system in early 2021, the massive increases in energy costs -and the shortages of natural gas- became fuel on the inflationary fire of CPG goods. Again, in October 2021 CTH noted that retail prices were going to rise quickly, and they did.
Throughout 2022 food prices have risen dramatically as the food distribution and processing system was now under pressure from all sides. The shortage of inputs (to refill food storage and warehousing needs) combined with the much higher costs to generate those inputs -the direct result of the exploding energy costs- created massive inflation pressure. The pricing result we are seeing now (third wave of food inflation) is exactly what we have stated, discussed and predicted for more than two years.
While all food costs are skyrocketing, the prices for manufactured or processed food are much higher than the price increases for fresh food.
While both fresh and CPG foods have risen in price due to energy costs, the processing of food uses more energy… and that energy comes at a higher price…. so the CPG inflation is much higher than the fresh half of the supply chain.
In essence, the CPG goods carry higher farming costs plus much higher manufacturing costs.
For those who say, ‘fresh food is healthier‘, you are correct. However, let me also remind you that we cannot feed 350 million people with fresh food alone – and simultaneously export billions of tons of bulk food products like grain, corn and soybeans.
The U.S. food distribution system needs processed food for retail restaurants, cafeteria, lunchrooms and grocery stores. [Ex. Italian restaurants will not start making pasta sauce from tomatoes, and if they did you likely couldn’t afford to eat there.]
So here comes Joe Biden, without a clue in the world of what I just described above. And his food inflation solution?…. well, you just have to hear it yourself to see it. WATCH (01:35, prompted):
.
[Wall Street Journal] – […] The personal saving rate, a measure of how much money people have left over after spending and taxes, fell to 3.1% from 3.4% in August. It is down from 7.9% a year ago as consumers tap their rainy-day funds.
U.S. credit-card balances hit $916 billion in September, returning to prepandemic levels, credit-reporting firm Equifax Inc. said. Balances are up 9% from January and about 23% higher than their pandemic low in April 2021.
A closely watched reading of underlying inflationary pressures, meanwhile, picked up last month and remained near a four-decade high. When stripped of volatile food and energy prices, the PCE price index strengthened to a 5.1% year-over-year increase—the strongest pace since March.
Friday’s report comes on the heels of other data showing consumers’ momentum weakened in the summer months. Consumer spending accounts for roughly two-thirds of total U.S. economic output. (read more)
A demented guy, installed as POTUS, who is a multi millionaire tells US buy generic. How much more of this administration’s crap are we going to take?
We are victims of tens of millions of stupid people who cast votes but never pay attention to the news. They watch late night talk shows and think Trump is still colluding with Russians and the price hikes were caused by Putin. It’s maddening. Who would have thought in the internet era that so many people would remain so stupid? Maybe the problem is too much classroom time spent by purple-haired fuglies obsessing over the kids’ sexual preferences?
Indeed!
We’ll just have to take it until we decide the best solution to get behind is reversing the stolen election. That action alone would negate everything this evil un-elected regime has done. Every law every illegal mandate every foreign agreement would be null and void. We would revert back to 2020 when President Trump was at the end of his four years as president. That is the solution.
Waiting until 2024 means whoever is in office, Republican maybe but if not President Trump we are truly in trouble, they will be faced with trying to reverse four years of Biden. It would be 4 years of endless court fights, etc. etc. etc. Why should we allow this to be the unworkable solution?
I wonder how much the cost of JoeBama diapers have gone up Maybe someone can do a FOIA request on the amount delivered to the WH
Inflation/recession is horrible. Robs us of our wealth. We’ve lived through many financial cycles and nothing has changed too much about the way we grocery shop.
We buy few processed foods, no soft drinks, shop the sales, use coupons, cook from scratch and eat out relatively infrequently.
I sure don’t like the high grocery prices, but these grocery shopping habits have served us well.
Shop the perimeter of the store. Just eat real food is our motto and so much healthier too.
I agree with processed foods being unhealthy but they are always much cheaper than eating healthier options.
I make a very healthy loaf of no-knead bread for less than a dollar.
The cost for a loaf of chemical laden, store-bought bread where I live is upwards of three dollars.
I can make a pot of tasty chicken soup for the same cost as one can of Campbell’s.
Using a crockpot or Instapot and recipes found on YouTube or online it is easy and quick to prepare healthy and cheap meals from scratch.
Cheaper and faster than going to the grocery store to buy commercially prepared “food” with ingredients I can’t pronounce.
Agreed.
I still have 2 quarts of homemade beef soup that is so delicious.
We can use it that way, or thicken for stew, for pasties, or…….
I do have atleast one weakness.
Polish sausage.
Another example,
I process pumpkins and vacuum bag it.
I’ll get approx. 4 pies out of this pumpkin.
To buy the made stuff is over $ 4.00 a pie.
The crust will also be made from scratch.
Here’s his diss on Kelloggs. Looks like he wants to take ’em out.
21 second vid.
The Kellogg foundation is an evil entity that gave millions to BLM and and painted the streets in Kalamazoo with their contributions to the rainbow
That’s not the point.
Hopefully the thousands of people working for Kelloggs have seen this and will vote better starting on Nov 8.
You will eat bugs and like it.
How Joe eat some ice cream and STFU. So sick and tired of these elitist awipes.
I do not agree with this strongly, fresh fruit is beyond steak at this point. I just saw 16oz organic strawberries for over 8$
“While all food costs are skyrocketing, the prices for manufactured or processed food are much higher tha the price increases for fresh foo
Those strawberries aren’t in season. The costs are much less when they are ripe locally. Which is why I buy and freeze then to eat during the winter.
amadillo, possum and common snakes coming soon
Pythons are quite tasty. Much better than “splatter-dillos” with leprosy. I won’t eat possum as their main diet is ticks.
You should see what chickens eat when given the opportunity.
Anything, I know. They are still delicious. Same with hogs. Anything that will eat it’s body weight in ticks is A-OK in my book.
Eewee
armadillo was known by my great grandparents during the Depression as “Hoover Hog”…..I just call it possum on the half shell
The lights are on, but nobody’s home.
Nor have they been for quite some time now.
Does anyone really doubt why the crazed lunatic assaulted Paul Pelosi? The Democrats are having a Marie Antoinette moment. Pelosi and Biden flaunt their ice cream and expensive cars while people are struggling to pay the bills. Heating oil just jumped $2.00 a gallon in the Northeast in a couple WEEKS. Diesel fuel is now being rationed out in the Southwest farm belt, and woe be to the farmers who havent or couldn’t stock up their storage tanks for a late harvest or Spring planting.
This Administration has taken a monkey hammer to the American way, the foundations of our economic, the pillars of common decency and mutual respect. I wish Mr. Pelosi a full and speedy recovery, so he can get back to inside trading and drunk driving. But if the Dems don’t change their tune, and fast, there won’t be enough emergency rooms to tend to their shattered political careers.
Umm. I suspect that there is a story being composed to cover up an intimate relationship.
I actually dont think so.
I think a moon bat went off.
They are also going off on aoc and the gang of garbage.
Pelosi says on the police audio that he knows him.
You’d expect this sort of thing from a C- student in 5th grade in a Chicago school.
I will, if he will…and he has to cook his own food as well. The White House Chef can’t do it for him.
Yes! Was there a single reporter who asked Biden if HE was going to switch to generics?
I don’t need Joe Potato to tell me how high potatoes are getting. Every word that comes out of Joe Potato’s mouth is a stinking lie. We all know, it’s all a part of the WEF Great Reset, Green New Steal Climate Change scheme.
Following history, in time, all power hungry tyrant Communist, end up trying to starve the people into submission one way or the other until they are stopped. Hopefully a majority of people across America are finally awake and personally affected by this “woke” nonsense to say enough is enough. MAGA
Truth Brother.
At first glance I thought it said geriatrics.
“Anybody gone into Whole Foods lately and see what they charge for arugula?” Obama, 2007
That reminds me … the brilliant Dem minds in Chicago, led by Rahm Emanuel but later championed by Lori Lightfoot, decided to “help” one of the poorest and most crime-ridden food desert neighborhoods, Englewood, by installing a grocery store. Guess which one they chose. Not Aldi, not WalMart Express, not any local budget grocery store, they chose Whole Foods. It opened in late 2016 and is already being closed in 2 weeks. Too much theft, low sales, not enough customers. DUH. What did they expect? Of course a whole lot of taxpayer $$$, both state and federal, were wasted on the project, and I suspect quite a few people involved were paid handsomely. Whole Foods still has a lease on the space for 7 more years so they need to find a subtenant.
(Walmart Neighborhood Market, not Walmart Express)
The problem isn’t the price of eggs? I just paid $4 for a dozen eggs, and I would say that is a problem. What an idiot.
Ahhh, smiles Ron Klain. The Kenyan’s plan is working.
I had talked last summer to my coworkers about the supposed bird flu moving through the chicken producers. Then all the “accidental” fires hitting food producers which included the chicken producing industry. It took almost 6 months and it was like a switch was flipped. One week the eggs I buy were $2.42/dozen and the next week the price was $4.85. These were free range brown eggs. I was surprised my coworkers realized this and commented the next week. Even the coworker who brings us free eggs from his chickens. Even the BLM supporting millennial coworker who voted for the Biden Regime.
When talking about it with the BLM coworker I told her she better pucker up since she aint seen nothing yet.
I recall a historic figure who said something that sounds a lot like his utterance of stupidity. “Let them eat cake” should sound familiar to those of us who post on this site.
Once again the middle class is screwed. We make too much for hand-outs, don’t make enough to be insulated from inflation.
I am so thankful I’m not needing to buy or sell a home right now. 30-year mortgage rates are over 7% now, even 15-year is well over 6%.
loan amount $240k
30-yr fixed
monthly payment at 7%: $1597
monthly payment at 4%: $1146
that’s $451 extra per month, $5412 for a year
Here’s another way to look at the impact of the higher mortgage rates. Let’s say your budget is $1151 per month.
At 4% you can afford to borrow $241k
At 7% you can afford to borrow $173k
Look at that. All of the people who plug in a max value to see what’s available that they can afford need to jack that max value down by nearly $70k! It’s astounding! That’s a whopping difference in the type or quality of properties. I’m sure a whole lot of people are kicking themselves right now for not buying at the beginning of the year before Biden ruined the housing market.
Way back when, the prime rate hit 19%.
That doesn’t excuse the near-doubling of mortgage rates in just 1 year. Obvious inept management of the economy. Biden can’t blame this one on Putin. Middle class homebuyers will be hardest hit. First-time middle class homebuyers are screwed.
Homes that were $125K two years ago where I live are going for $450K today and alot of them are being bought by “immigrants”.
I don’t listen to anything this guy says. I mute the tv every time he comes on. I feel bad for the young folks. Here in the Central Valley of California, sometimes their choice is filling their tanks or buying food. They all have added credit card debt to help pay for necessities. I was raised by Dust Bowl Okies, I know how to shop and cook within a budget. This time is also very hard on seniors. The only ones in our family who are not struggling, are the ones on California’s very generous welfare. Talk about an upside down world. This is our life until we can get these evil liberal/progressives out of our lives.
I am already doing that but so are alot of other people so there isn’t much on the shelves. Where do you get generic gas for the car??
What little processed food I buy is already generic. I made taco bowls last night… feeds four… spent 6 bucks