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Food and Fuel Inflation no Secret to Consumers

Beef prices rose more than 10 percent over last year and the Department of Agriculture reports at least another 5 percent increase in 2012. In spite of official White House news that inflation stands at under 2 percent, that isn’t the reality consumers are seeing in the supermarket or at the gas pump.

By Andy Wright from Sheffield, UK

A major contributor to beef prices is drought in Texas and Oklahoma that resulted in a scarcity of water and food for cattle, resulting in smaller herds. According to the Department of Agriculture, the 91 million cattle nationally represent the smallest herd since 1952. When you add to that rising beef exports and feeds costs, the price of beef will continue to surge for some time to come.

“Your customers get tired of hearing every week that it’s going up,” said Andrew Hurford, manager of Kissin Fresh Meats. “Sooner or later, they’re going to reach a tolerance ceiling and they’re going to say maybe it’s not worth it anymore.”

We do a lot of fish now and chicken,” said Johanna Butler, visiting the Italian Market from Swedesboro, NJ. “I mean, beef indeed is very expensive, so I’ve made some changes.”

But beef isn’t the only food item with rocketing prices. According to the Wall Street Journal, the USDA is forecasting the sharpest increase in the food inflation rate from one year to the next since 1978. The agency issues a monthly forecast for retail food inflation, which has been building for several months, and had been predicting an increase of 3% to 4% since February.

(SOURCE) http://online.wsj.com/article/SB10001424052970204644504576653120117664898.html

The USDA points to food inflation next year of 2.5% to 3.5%, barring any added factor such as poor harvests or trade imbalances. Each one percent increase in food prices equals $12 billion dollars in annual spending.

CNBC did a survey of food prices around the nation and came up with the following list of food items and inflationary prices:

  • Ground beef up 6.8 percent month over month, and 11.1 pct year over year.
  • Butter, up 3.2 percent monthly and a stunning 27 percent over the past year.
  • Coffee, up 6.5 percent and 16 percent.
  • Potatoes, up 3.6 percent and 7.1 percent.
  • Lettuce actually fell 5 percent monthly after a spike higher in December, but is up 5 percent over the past year.
  • Bread up 1 percent and 3 percent.
  • Chicken up 0.8 percent and 4.3 percent .
  • Egg prices have been fairly steady.
  • Milk, down slightly month over month, but up 2 percent year over year.

(SOURCE) http://www.cnbc.com/id/41831886/No_Inflation_That_s_Not_What_Food_Prices_Are_Saying

With food and gas now consuming almost 15% of annual after-tax income, the picture reminds economist of another era in recent American history. Bin Gao, rates strategist at Bank of America Merrill Lynch, wrote in a research note, “This time it feels different and with stronger similarities to the 1970s in terms of the supply shock element. In an economy which continues to struggle for a solid recovery, the high oil price raises concerns of stagflation.”

Most Americans don’t need economists or Washington to give them the true picture of inflation. They see it on a regular basis every time they gas up their car or step inside the local market.

© Copyright Off The Grid News

10 comments

  1. Obama also stopped any increases in social security because “there wasn’t any inflation last year.”
    Obviously a liar, which I have proof of, prior to his election. But thenon-taxpaying public swallowed his bait and voted him in. Obama’s going to give me my rent and car payments! Where is the money coming from? From Obama! Where does Obama get the money? “From his ‘stash’!”

    As long as we have a large percentage of people who don’t work, don’t pay taxes, and live off welfare, the Obama types will be voted in. However, I also personally know educated people who also voted for this deadbeat, who never had a real job. Now he’s living in public housing paid by us.

    Are we ready for the next round?

    • I have a four year college degree. I have worked since I was 16 years old. I don’t want free healthcare, however, I did try to purchase insurance about five years ago and was denied by every insurance company. The reason was because I had an annual checkup and was diagnosed with high blood pressure. Well, at least I had a blood pressure of 130/93. The doctor thought I should try a pill. I did and changed the way I ate. A few months later, I stopped taking the medicine because I didn’t need it. The insurance company said that because I had been diagnosed with high blood pressure and given meds for it ,it was considered “uncontrolled hypertension” and couldn’t be insured for at least a year. Try back in a year and then, maybe.
      Well, I don’t want anything given to me, but if the private companies don’t want my money, then where do I get insurance? I don’t see anything wrong with the government (of the people, by the people) providing a Medicare like insurance policy for people who have no other option. Oh, I guess the millions of us who can’t get insurance could always go to the ER everytime we get a sore throat. You can be assured that no clinic will take a new patient without insurance.
      I voted for Obama.

  2. The truth is very simple. Everything is getting more expensive. The average American will have to lower their standard of living. That is not going to be easy and I am afraid that civil unrest will happen as soon as welfare or food stamps are no longer available. We are stocking up on food storage to prepare for what is surely to come. Check out ShelfRelianceSanAntonio.com The food is fantastic and the prices low (… for now). I’ve got car insurance, and home insurance…. food insurance is the logical next step. Even if things are getting better, which I doubt, we can always eat the food!

  3. I have been stocking up on food for some time now, we grow and can our own vegetables, raise chickens for meat and eggs. The next step will be a cow or goat for milk , butter and cheese. Doing all this, I still feel the rise in prices. Everything from feed for our chickens to gas for our cars. Once food stamps and free housing run out, I’ll be also ready to protect my homestead.

  4. Also inflated under Obama and his merry band of czars: People on food stamps. The number is up a whopping 47% (!!!!) since he took office, and just went to another record of 46.5 **million** people as of last report in Dec. Just go to the USDA website to get the latest data.

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