Hate to say I told you so, but this one could be spotted a mile away. And some of us did. The law of unintended consequences is in full effect as the food price inflation (aka Agflation) I feared is finally here. We're not talking out-of-control price hikes at this point - but the trend is the trend and our monetary policy is definitely exacerbating it.
From the Wall Street Journal:
Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald's Corp., Kellogg Co. and Kroger Co. have begun to signal that they'll try to make consumers shoulder more of the higher costs for ingredients.
Our officials are really into CPI as their inflation measure, which is a shame because it doesn't actually take into account, well, inflation. "Inflation ex-food and energy" is the most oxymoronic phrase in the economic glossary. Here's the troof:
Food prices are rising faster than overall inflation. The consumer price index for all items minus food and energy rose 0.8% over the year to September, the lowest 12-month increase since March 1961, the Bureau of Labor Statistics said. The food index rose 1.4%, however. The U.S. Agricultural Department is predicting overall food inflation of about 2% to 3% next year.
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