The inflation rate, even according to the government (who often tries to dissuade fears by downplay), is inevitable even within the year. Now is the time to reevaluate our shopping habits and how we can get the most for our dollar ahead of food inflation. We need to plan ahead. We must …
Would you like a breakdown of the upcoming inflation of food? Coming to a pocket book near you . . .
http://www.ers.usda.gov/briefing/cpifoodandexpenditures/data/cpiforecasts.htm
SOURCE
| Changes in Food Price Indexes, 2009 through 2012 | September 23, 2011 | |||||||||
|
Item
|
Relative importance1
|
Month- to- Month |
Year- over- Year |
Annual
|
Annual
|
Forecast
|
Forecast
|
|||
|
Jul2011 to Aug2011
|
Aug2010 to Aug2011
|
2009
|
2010
|
20112
|
2012
|
|||||
| Consumer Price Indexes | Percent | Percent change | ||||||||
| All food |
100.0
|
0.5
|
4.6
|
1.8
|
0.8
|
3.0 to 4.0
|
2.5 to 3.5
|
|||
| Food away from home |
43.1
|
0.4
|
2.7
|
3.5
|
1.3
|
3.0 to 4.0
|
2.0 to 3.0
|
|||
| Food at home |
56.9
|
0.6
|
6.0
|
0.5
|
0.3
|
3.5 to 4.5
|
3.0 to 4.0
|
|||
| Meats, poultry, and fish |
12.5
|
0.3
|
7.7
|
0.5
|
1.9
|
5.5 to 6.5
|
3.5 to 4.5
|
|||
| Meats |
7.9
|
0.7
|
8.9
|
-0.6
|
2.8
|
6.5 to 7.5
|
3.5 to 4.5
|
|||
| Beef and veal |
3.7
|
0.4
|
10.4
|
-1.0
|
2.9
|
8.0 to 9.0
|
4.5 to 5.5
|
|||
| Pork |
2.5
|
0.7
|
7.5
|
-2.0
|
4.7
|
6.5 to 7.5
|
3.0 to 4.0
|
|||
| Other meats |
1.7
|
1.2
|
7.7
|
2.3
|
-0.1
|
3.0 to 4.0
|
2.5 to 3.5
|
|||
| Poultry |
2.4
|
-0.1
|
3.4
|
1.7
|
-0.1
|
2.5 to 3.5
|
3.0 to 4.0
|
|||
| Fish and seafood |
2.2
|
-0.4
|
8.3
|
3.6
|
1.1
|
5.5 to 6.5
|
4.0 to 5.0
|
|||
| Eggs |
0.7
|
4.9
|
14.5
|
-14.7
|
1.5
|
5.0 to 6.0
|
3.5 to 4.5
|
|||
| Dairy products |
6.1
|
0.9
|
9.1
|
-6.4
|
1.1
|
5.0 to 6.0
|
3.0 to 4.0
|
|||
| Fats and oils |
1.7
|
1.0
|
10.8
|
2.3
|
-0.3
|
6.5 to 7.5
|
2.5 to 3.5
|
|||
| Fruits and vegetables |
8.4
|
0.2
|
6.3
|
-2.1
|
0.2
|
3.5 to 4.5
|
3.0 to 4.0
|
|||
| Fresh fruits and vegetables |
6.4
|
0.4
|
7.5
|
-4.6
|
0.6
|
3.5 to 4.5
|
3.0 to 4.0
|
|||
| Fresh fruits |
3.3
|
0.7
|
9.1
|
-6.1
|
-0.6
|
2.0 to 3.0
|
3.0 to 4.0
|
|||
| Fresh vegetables |
3.2
|
0.0
|
6.0
|
-3.4
|
2.0
|
4.5 to 5.5
|
3.5 to 4.5
|
|||
| Processed fruits and vegetables |
1.9
|
-0.4
|
2.4
|
6.6
|
-1.3
|
1.5 to 2.5
|
3.0 to 4.0
|
|||
| Sugar and sweets |
2.2
|
1.2
|
4.7
|
5.6
|
2.2
|
2.5 to 3.5
|
2.0 to 3.0
|
|||
| Cereals and bakery products |
7.9
|
0.8
|
5.3
|
3.2
|
-0.8
|
4.0 to 5.0
|
4.5 to 5.5
|
|||
| Nonalcoholic beverages |
6.7
|
0.3
|
4.0
|
1.9
|
-0.9
|
2.0 to 3.0
|
1.5 to 2.5
|
|||
| Other foods |
10.7
|
0.9
|
3.0
|
3.7
|
-0.5
|
2.5 to 3.5
|
2.0 to 3.0
|
|||
| Note: Bolded entries reflect changes from the previous month’s forecast. Green arrows indicate an increase and red arrows indicate a decrease in the forecast from the previous month’s forecast.
1BLS-estimated expenditure shares, December 2010. Food prices represent approximately 14 percent of the total CPI. 2Forecasts updated by the 25th of each month. Sources: Historical data from Bureau of Labor Statistics; forecasts by Economic Research Service. |
||||||||||
What is food inflation? Basically, it is the worth of everything you eat going up except the money that you use to buy the food. Classically the funny money inflation metrics do not include inflation on fuel or food. I know, I know, you are thinking, “but those are the things that cost the most,” exactly. This is what keeps the numbers looking so good. Factor in that the Farm Bill commodities float on a sea of oil and subsidies and the real costs start to hit very close to home.
You already know how serious the inflation on food is. Have you priced bacon lately? May be it is that the real paradigm was there all along right in front of us:
The USDA Food Pyramid? Yes, the widest part at the base is what you are “supposed” to be eating more of—which is why we call it the Farm Bill Pyramid:
The commodities are based on cheap oil (artificial fertilizers, fuel for farming implements, trucking and transportation, etc.). As there is an inflation in oil prices there follows an inflation in food prices as well.
Let me illustrate further: try to find something in the grocery store that does not have corn syrup in it. Actually, you would be very hard pressed to find foods without corn or soy derivatives in the food. Since corn and soy are row crop commodities, which depend on oil to fuel the production you will naturally see inflation on food when you see inflation on oil.
The food inflation markers are there—I hope that you are thumbing through your seed catalog for this spring.
Chaya
Photo Credits:
WWII Propaganda Poster by http://creativecommons.org/licenses/by-nc-sa/3.0/
Food Pyramid from http://www.nlm.nih.gov/medlineplus/ency/imagepages/19836.htm
Clipart from www.cliparts101.com