Posted on 07/06/2022 9:45:41 PM PDT by SeekAndFind
Before the mayhem, Ukraine was known as “Europe’s breadbasket.”
The most fertile soil deposits on Earth lie within the country’s borders. This “chernozem” (or “black soil”) lets the nation produce massive wheat and oilseed exports.
But the Russia-Ukraine war threw the breadbasket into chaos…
A Russian blockade halted Ukraine’s agricultural exports. Food prices have soared worldwide as a result – and that’s on top of existing inflation.
I’m not sharing this to alarm you, though. In fact, I want to highlight some early signs of relief…
New data shows that the rate of food inflation may be stalling, at least for the moment. And if this trend holds, we should see a pause in our climbing grocery bills.
Let me explain…
This February marked almost two years of food supply-chain chaos.
In 2020, staff shortages due to COVID-19 crippled meat-packing plants. That put a squeeze on beef and chicken. Then, turnaround times for cargo vessels nearly doubled in 2021, slowing food imports to a crawl.
Plus, nearly $20 billion worth of U.S. crops failed due to natural disasters in those two years combined.
The costs of these headwinds made their way to store shelves. From 2020 to 2022, the price of food and drink soared by 10% for urban consumers.
Then, on February 24, the situation went from bad to worse. That’s when Russian troops set foot on Ukraine’s treasured soil.
The Russian blockade kept Ukraine from selling grain. On top of that, much of the world sanctioned Russian oil, making it more costly to transport food and agricultural products.
That one-two punch sent food inflation soaring.
We can track food prices using the Bloomberg Agriculture Spot Index. This index shows the cost of agricultural commodities like wheat, soybeans, and corn… And it broadly reflects the supply-demand dynamic for food in the U.S.
Before the pandemic, this index rose modestly. It was up about 9% in 2019.
The next year was a different story. Supply-chain issues drove the index up 24% in 2020. Then, 2021 saw another 23% year-over-year increase.
But the first half of 2022 has dwarfed even those moves. This year, the index soared almost 30% to its mid-May peak. Take a look…
This dizzying rise put a major dent in consumers’ wallets. But relief might be on the way. You can see it on the right side of the chart…
This index is now in decline. In fact, June was its biggest monthly fall in more than 10 years. That’s great news for American consumers.
What’s more, this move is being echoed outside the U.S.
The U.N.’s Food and Agriculture Organization (“FAO”) tracks price changes in various food commodities across the globe. It wraps this data into the FAO Food Price Index.
The Food Price Index has fallen for two consecutive months. Take a look…
After a blistering streak to the upside, food prices are starting to come back down…
The U.N. credits this move to falling demand and price declines in vegetable oil. Indonesia recently ended a ban on palm-oil exports, which helped create new supply.
Prices are also falling for coarse grains like corn, thanks to improved growing conditions in the U.S. And as for Ukraine, the nation’s agriculture exports were up 80% in May.
Whatever the causes, the decline in food prices is a much-needed reprieve for consumers. It means that our grocery budgets may be a little less stretched, for now.
We’re finally seeing a change in the trend. And with any luck… it means food inflation has reached a short-term peak.
Prediction: What has gone up (prices) will not be coming back down. That newly inflated price will become the new base price.
There may be a few acceptions, one hopes.
Ask the Danes or those in Sri Lanka.
https://dailytradealert.com/2022/04/20/todays-a-great-time-to-be-invested-in-the-market/
article from same guy in-April
The operative word here is, MIGHT. It’s a guess. Likely wishful thinking for a political reason. Nothing more.
Around here eggs rose to double their original price, and now they are down to 115% of the original price, plus I found hamburger back down to $3.50 a pound. Hopefully this continues. I’ve been avoiding processed food even more than usual, because thats where it got bad.
We just stopped buying all kinds of stuff, if it isn’t necessary it’s no sale
I hate being ripped off.
Get out the popcorn, we have only started.
Brown Sugar salmon filets at Publix were back down to $6.99.
Awesome. I'll go buy a Deep Fryer tomorrow at Wally Mart. I've never had one, but maybe it's time.
Prices matter little in the face of unavailability. Holodomor and the Turnip Winter is just over the horizon.
What is it now, ever smaller portions for the same amount of money?
The idiots ruling the world should be hung from trees like apples.
RE: We just stopped buying all kinds of stuff, if it isn’t necessary it’s no sale
RE: I’ve been avoiding processed food even more than usual, because thats where it got bad.
Well, it looks like millions of people are thinking like you guys. So, guess what happens to the price of these food products when you refrain from buying? Yep, they start to fall.
I’ll believe it when I see it.
But, true or not, I’m still expanding my garden.
I found a store that regularly has hamburger for $1.99/lb. Its the fattier grade, 72% I think, but at that price I can drain off the fat!
It was a surprise to find it, because all the signs were for other grades of hamburger. I pretty much spotted this one by accident.
All of the boomeranging suicide sanctions need to end.
Civilized countries must ensure the free flow of fuel, fertilizer, and food.
The arrangements for all of the above should be made by attractive Russian women wearing dirndl dresses.
Umm no, not buying this baloney BS.
Food prices have not even remotely come close to spiking/peaking. Food processing plants in US are still being mysteriously burnt down, etc. and not one mofo has been caught yet. Irony, eh?! Euro Greenies killing farming in a number of high producing food countries. ETC!
Personally, looking for food prices to go 100% over what they were 2+ years ago, but hey, that my take.
There are many money saving strategies. Having a good “Victory” garden is one good way. At age 5, I came home from kindergarten one day a found my father and a man with a horse digging up the front yard and 2 side yards. This was 1943, and we kept this garden going for the next 11 years. Stopped growing potatoes and most of the corn after a few years. Canned and preserved a lot for winter and spring.
When we saw the build up of troops around Ukraine and war was being discussed. we bought a 3 to 6 month supple of staple canned foods and soups and some bulk whole grains and seeds, have not noticed a much bigger food bill. Mostly buy milk, eggs, frozen orange juice, fresh vegetables and fruit on sale, and meat on sale.
At any rate, good to see the laws of supply and demand at work recently. On the way to vacation week July 1, we found a gas station with $4.29 regular in western Virginia. Very happy, will hit it on the way home.
We just stopped buying all kinds of stuff, if it isn’t necessary it’s no sale
I hate being ripped off.”
So do I.
The only way to fight inflationary pricing is to withhold purchases.
Eventually a merchant will knock down the price, when inventory doesn’t move.
I bought a bunch of rib eye steaks a week ago at $4.99 a pound. Froze most of them.
The price of a crate of 5 dozen eggs at the local store hit $18, and came back down to $14. Eggs sold by the dozen oddly remained at $2.70 throughout.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.