Amazing media discovery: Rising food prices!
This is really inexcusable. Given the rising price of food over the last year, a story like this in the Boston Globe is so far behind the curve that it's still far back on the straightaway:
After nearly two decades of low food inflation, prices for staples
such as bread, milk, eggs, and flour are rising sharply, surging in the
past year at double-digit rates, according to the Labor Department.
Milk prices, for example, increased 26 percent over the year. Egg
prices jumped 40 percent.
Escalating food costs could present a
greater problem than soaring oil prices for the national economy
because the average household spends three times as much for food as
for gasoline. Food accounts for about 13 percent of household spending
compared with about 4 percent for gas.
It reinforces something I've been saying for over a year and a half: No amount of real-world believe-your-eyes evidence is news in the establishment media until it's verified by government statistics. So even though my discount-store can of tuna jumped from 50 cents to 60 cents last year, rising food prices haven't been news until now because the Labor Department hasn't said it's news. Only now is it acceptable to highlight real-world evidence, because it backs up the numbers:
Amy Brnger, 43, of Portsmouth, N.H., just needs to look at her
grocery receipts. For a long time, feeding her family of three used to
cost around $125 a week. Suddenly this winter, her bill leaped to about
Quickly, Brnger, a school counselor and mother of a
9-year-old daughter, looked for ways to save. She buys fewer organic
products, which can cost twice as much as conventional goods. Instead
of buying chicken breasts, she buys whole chickens and cuts them into
parts, saving about $2 a pound. She buys dried beans, instead of
canned. And she is baking her own bread.
Not surprisingly, the article also manages to foul up the reasons behind the increases:
Several factors contribute to higher food prices, analysts say, but
none more than record prices for oil, which last week closed above $105
a barrel. Oil is not only driving up production and transportation
costs, but also adding to demand for corn and soybeans, used to make
alternative fuels such as ethanol and biodiesel.
As a result,
corn prices have more than doubled in commodity markets over two years,
and soybeans nearly tripled, according to DTN, a commodities analysis
firm in Omaha. Meanwhile, with poor harvests in major wheat-producing
regions, wheat prices have more than tripled.
Alas, no mention of the generous government subsides that make ethanol production cost-effective (or did for a while, anyway, but that's another story) — which is at the root of the problem. Whatever.
Still, the article performs a worthwhile public service in that it warns that rising food prices are not a passing phenomenon.
This combination of a weak dollar, soaring energy prices, and global
demand recalls the 1970s, when retail food prices rose an average of
nearly 9 percent a year, said Bill Lapp, president of Advanced Economic
Solutions, an Omaha research firm. Over the past year, Lapp said, food
prices rose nearly 5 percent, more than double the average rate of the
previous 10 years. Prices will rise even faster the next five years, he
forecasts, increasing at an annual rate of 7.5 percent.
"Much as we saw in the '70s," he said, "these sharp increases are going to be sustained."
Yes, it's a time of growing scarcity and demand not just for energy and metals, but for foodstuffs. As people are wont to say, if you can't fight the trend, you might as well find a way to make some from it. Which brings me to the Agora Financial Resource Reserve.
The Resource Reserve pulls together all of our advisory and trading services in the natural resource sector — Outstanding Investments, Kevin Kerr's Resource Trader Alert, Byron King's Energy and Scarcity Investor… and coming soon, Ed Bugos's Gold and Options Trader. Oh, plus lifetime admittance to the annual Agora Financial Investment Symposium. This package is available through Thursday at a special price — but it may close sooner if response is big enough that we reach our membership limit. Here's where you can learn how it all works.