U.S. Food Inflation Now Running At 22% And Rising

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U.S. Food Inflation Running at 22% (Breitbart, May 26, 2014):

After five years of the federal government telling the public that despite a $3.5 trillion increase in monetary expansion, the inflation rate is below +2%, the Department of Agriculture (DOA) just warned the American public that the consumer price index for food is up by 10% this year.

The DOA tried to blame food inflation on the drought conditions in California, but last year’s drought was worse and food prices fell by -6%. The real problem is Federal Reserve monetary stimulus is stimulating inflation. I reported in “Food Price Inflation Scares the Fed” two months ago that commodity food costs were exploding on the upside. Given the lag in commodity costs impacting prices on grocery store shelves, annual U.S. food inflation is now running at +22% and rising.

The DOA tried to blame food inflation on this year’s drought conditions in California that they stated may have “large and lasting effects on U.S. fruit, vegetable, dairy and egg prices.” It is true that California droughts are always agricultural issues, since 80% of the state’s freshwater supply is used by farms and ranches. This has resulted in surface water deliveries to farms and ranches from reservoirs and the California Aqueduct being cut by 32.5%, or 6 million acre-feet.

But “large and lasting effects” on agricultural production in California will be avoided this year by pumping 5 million acre feet of groundwater from underground lakes, known as aquifers. The aquifers are a relic of the era when the Pacific Ocean covered much of the state. California has over 850 million acre feet of water stored in 450 known groundwater aquifers, enough to cover the state to a depth of 8 feet.

The State of California-sponsored UC Davis/ERA Economics farm report dated May 19th stated that only about 410,000 acres, or 7.5%, of California’s 7 million acres of Central Valley farmland will be taken out of production this year. Losses for the 80,500 farms and ranches in California due to the drought will be limited to only be about $738 million, or 2%, of the state’s $42.6 billion annual agricultural revenue.

California remains number one in agriculture revenue with 11.3% of the US total. The state accounts for 15% of national receipts for crops and 7.1% of the US revenue for livestock and livestock products. As the producer of nearly half of US-grown fruits, nuts, and vegetables, California exported $18.18 billion to other states and countries in 2012.

California’s abundance of sun and ground water explain the state’s farming abundance but also explains the cyclical droughts. But those same cyclical forces are forming an El Niño condition in the equatorial Pacific Ocean that is expected to hammer the Golden State with torrential rain next year.

The real culprit for food inflation is the $940 billion of additional monetary stimulus from the United States Federal Reserve’s quantitative easing over the last twelve months. Inflation has been in hibernation for a long time, but it is wide awake now.

The author welcomes feedback and will respond to comments by readers.

3 thoughts on “U.S. Food Inflation Now Running At 22% And Rising

  1. I would love to see torrential rains next season, but probably won’t be alive to see it. Rain is a beautiful thing, and we have endured endless dry, hot summer 12 months a year for quite a while. I hate summer, and that is all we have had.

    The radiation from Japan is also causing problems that nobody is addressing. How will that affect El Nino, assuming we get it at all? Already, we have big sea animals in our bays desperate for food and oxygen. Rain will not help them survive, and there are no services in place to deal with their dead bodies. The vulture creatures that nature provided to eat dead bodies off the land and beaches won’t touch these animals……somehow they can smell or sense the difference. Perhaps they smell the poisons from Japan. This will not help the health of any person in CA.

    There are no services to deal with them, so they will rot on our seashores, the stench will be awful, and I don’t know how my friends on the beaches can bear it.

    Nothing is being done about any of this, now they are relying on El Nino to give a good rain year to save the agricultural state. What if it doesn’t happen? Or worse, what if hurricanes occur instead? All of this is possible; heating atmospheres are causing climate change around the world.

    There is a lot here I don’t trust, fools in Washington DC are looking for easy answers.

    The real problem on food prices is the fact some of the food comes from Mexico and other places, and our dollar is falling like a stone, making it more expensive for the American consumer. Blaming it on the weather is absurd. The real problem is that the dollar has been watered down to nothing,

    More than half the world no longer uses the dollar. Electronic currencies have made converting currencies to the dollar, or any other currency before buying or selling, obsolete. Electronic currencies translates the value of each currency at the time of transaction, converting to the dollar is now obsolete. As a result, the US is sitting on piles of paper nobody wants or needs.

    This is the truth they don’t want anyone to know regardless it is obvious. The implosion is happening as I write this, and the lies are beyond belief.

  2. Marilyn,
    So get prepped.

    I feel your personal situation is affecting your thoughts and feelings, which is being projected. Your experience is invaluable and needs preserving, not writing off!

    We are all victims of this engineered mess, for whatever reason, and must adjust.

    My wife’s Aunt has just had a mastectomy, no idea why, except she took a minimum 20 sweeteners/day for ever. Now evidence shows the link.

    We are all programmed by clever marketing, be it food or medication. The result is the same.

    Your knowledge must be preserved and projected. Think on.

    Stanley

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