Posted on 03/05/2023 8:04:25 AM PST by blam
Inflation re-accelerated in the US and Europe last month, highlighting sticky price pressures that keep central banks ultra-hawkish and committed to increasing the terminal rate. Interest rate markets are still repricing the ‘about face’ in the disinflation narrative, which has caused cross-asset turmoil. Despite the lingering inflation storm, there is good news: global food prices in February declined for the eleventh consecutive month.
The United Nations’ Food and Agriculture Organization’s Food Price Index fell .6% last month to 129.8. Last month’s decline was driven by the price of slumping cooking oils and dairy products, while grain and meat prices were flat, and sugar prices climbed.
According to the data, the food supply crisis triggered by the Covid pandemic and the conflict in Ukraine is showing signs of improvement. The FAO’s index reached an all-time high following the Russian invasion of Ukraine, but prices have since dropped by 18% from their peak. Nevertheless, prices are still 42% higher than their levels during the onset of the Covid outbreak.
Although global food prices peaked one year ago, consumers have complained supermarket prices are still high. This is because it takes time to filter through, while supermarkets deal with elevated transportation, energy, and labor costs.
However, there is more promising news. The largest US meat company, Tyson Foods, missed Wall Street estimates for quarterly profit last month for operating margins this year in the face of falling – yes, falling – beef prices, easing demand for pork, and an ongoing crash in chicken prices as a result of overproduction.
Fast food restaurant chain Wendy’s Co. reported commodity inflation in the mid-single digits this year and beef prices to be deflationary in its current fiscal year. And Kraft Heinz Co. said there would be no more price hikes in North America, Europe, Latin America, and Asia.
Unless there is another global supply chain disruption or worsening of the war in Ukraine, food prices might not have just peaked, but declines could soon show up in supermarkets.
Everyone who tried canceling oil lied about wanting to cancel it.
Crashing chicken
At least we now know what happened after the chicken crossed the road
Pass the bong around a few times and I’ll believe this...sarc
Uh, that is not a price drop.
Sounds like UN propaganda BS to me. If this is true, why are foreigners from all over the globe rushing to America and begging for something to eat? Millions of Tiny Tims. “Please sir, can I have some more?”
Let’s see. A twenty rung sprint up the ladder and one step back should be loudly lauded.
I wish the lower food prices would show up soon. I went to the grocery store yesterday and a simple pack of turkey hotdogs was $6.49. I passed on those. Also, it’s amazing the difference in prices of the same items from one state or region to another.
The PPI is still 5% yoy. That’s a lagging indicator. So price drops aren’t happening soon.
> Pass the bong around a few times and I’ll believe this...sarc
Yep, one can assume that anything out of a United Nations agency is nothing but propaganda issued to further “the agenda”.
Hellmans is like $6.50. I would buy for $3 on sale 2 years ago.
Kind of hard to believe anything a government or pseudo government organization says.
Here is an article that I thought was rather interesting. I’m dropping it in here since it is Zerohedge and FR says articles from that site are not allowed to be posted on their own.
Reminds me of the old Soviet press,
There is your price cut right there. Prices could have gone up another 20% but we cut that back to even, so you see, we are facing deflation. Liars figure.
They were sophomores. We are taking the graduate course.
I’ll believe it when I see it. Chick-Fil-A is $9 for a combo meal. Went out to dinner last night at a local pub and it was $40 each, which included a couple of drinks.
I would pass on Turkey hot dogs despite the price
In other news...the chocolate ration is increased from 12 to 10 ounces.
And in the interests of efficiency of production
The weight of the wrapping, cardboard container and mandated 5 page list of contents and adverse health issues is included in the total weight
In general, forget about it. You won’t see much price drop at the grocery store. Retail has learned a new elasticity of demand to price. People may switch what they eat but they will not quit eating. Retailers have learned bigger margins for lower sales are just fine as well. GM and Nissan’s CEO and COO have said they intend to maintain inventories as low as possible to support high prices.
Leverage is the name of the game. Retailers have leverage over raw material suppliers because the suppliers have no outlet without retail.
Food prices aren’t going down. If they do it will not be by much. You’ll still need a wheelbarrow to carry enough to buy a bill of groceries.
Our response has been to drop just about all name brand products if a generic is available.
Another problem besides price is the contents of a can. A can of peas and carrots is mostly liquid, no matter what brand.
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