Tuesday, January 18, 2011

Cattle Network Warns Farmers: Big Time Inflation Is Coming and You Better Have an Explanation

The insiders know, they see it coming. A spike in food prices is just around the corner. Here's what Drovers Cattle Network is telling farmers:
Americans have spent less than 10 percent of their disposable income on food for many years now. That’s about to change. Food prices are on the rise and there will be new records set for some, actually many goods, this year. Meat, dairy and poultry prices are among the products on pace to set records.

While the general inflation rate was nearly zero in 2010, food and fuel presents another story. Predictions for 2011 food inflation range from 3 percent to 6 percent, with some estimates in recent days pushing into the double digits.

This will come at a time when gasoline and energy prices also are on the rise—oil is projected to reach beyond $100 per barrel....Consumers will see higher prices in the supermarket and hear about record commodity prices and will perceive you as riding waves of money.
Part of this is the current supply and demand dynamics for food products, but it is also the Ben Bernanke printing press. It's going to be a perfect storm of events pushing food prices much higher. DCN is talking about 3 percent to 6 per cent inflation, but I think it will be over 10 percent. It's going to be pretty ugly out there. And some will blame the farmers. DCN is telling farmers:
News stories are already outlining this year’s higher food prices. In recent days, I’ve seen coverage on ABC, NBC, cable news and a National Public Radio business show. Still, nothing drives the point home like actually feeling it in your wallet, and that is yet to come in a significant way. I believe consumers are in for some sticker shock, and they’ll wonder what the heck has happened.

They will point to “big, greedy, modern farmers.” Never mind that globally, there are 1 billion more people to feed than in the 1990s, as well as more who’ve upgraded their previous diets.

My point is with rising food costs on the horizon, consumers will again look at farmers with jaundiced view. So, polish up your talking points about the reality of farming, finances and food production today and be prepared to explain the truth to consumers in a calm, thoughtful way.
If you have a big freezer, fill it with meat right now.


  1. Cowpool?

    I prefer the grass fed and finished kind myself, but it's a start.

  2. Have family here in Indiana that works with land permits in a farm community. Tillable farm land in certain parts is moving for $7k/acre! Just 6-7 years ago it was around $2500-$3000/acre.

  3. Thank you for getting the word out.

    Meat prices are rising because feed prices are rising. There is an order-of-magnitude loss of total calories in the conversion of cereals and soy to beef and other meats.

    May I offer a counter-proposal to the freezer full of beef? The freezer isn't very cost effective and it would soon be exhausted. I suggest simultaneously stocking up on dry staples like rice, white flour (or wheatberries for grinding your own whole wheat--only as much as you're going to use at one time as it does not keep), lentils, and so on, while also growing your own backyard vegetables, including calorific staples like potatoes.

    I suggest also reading "The Alpha Strategy" by John Pugsley. It's available online.

  4. But grains and carbohydrates are poisonous to humans...Are you suggesting we all poison ourselves to save money?

  5. Grains are not poison. Duh. While you starve, we will eat the grains.

  6. I don't blame the farmers, I blame the Federal Reserve, Wall Street and the dystopian Neoliberals with their Neofudalist agenda.

  7. Anybody remember the price of bread in the 70's? Wheat at $3.60 then meant that there was 6 cents worth of wheat in a loaf of bread. Fast forward to now with wheat at $7.20 there should be 12 cents worth of wheat in a loaf of bread. What is the price of bread today?
    Any attempt to pin the increase in the price of bread to the farmer is ludicrous. Also if you think our input suppliers(chemicals, fertilizer, fuel & etc.) are going to let us keep a windfall in profits you are mistaken. Everyone will want a piece of the pie and the farmer will be at their mercy.
    Farmers don't set the price of wheat.

  8. Farmers have for the most part a hard life.Blame the Fed and world population growth for rising food prises in America. One helpful idea would be to grow as much as possible in our back yards. Another is to support LOCAL farmers markets and help the little guy in each of our respected areas of America. Supporting local does work.