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Advanced-Ad-5693 t1_ixxlebc wrote

The premise is correct but your facts are kind of irrelevant.

  1. The current drought is resulting in 30%+ drops in yields, and for some crops like tomatoes they're just tilling plants back into the ground or letting them rot because they can't get water. For some crops,ike strawberries, it's a short term price hike. Anything that grows on a tree in a drought area, like almonds, is at serious risk of a much longer spike. It will take 10+ years to recover crops grown on trees. Almond farms in California are a very real risk that no one is paying attention to. In the Midwest it's worse, because drought is going to fuck with soil salinity. Farmers dropped fertilizer on the ground that then didn't get proper absorption. It's going to require several rounds of crop rotations to rebalance the soil chemistry and will impact their ability to use fertilizers on the next couple of rounds, reducing yields even more.

  2. Animal husbandry is severely fucked. Right now beef prices are on the drop. Everyone thinks it's great, but the real reason is that there's excessive slaughter going on because ranchers know they can't afford to feed cattle through winter. Cows are being slaughtered at record numbers too, which means we're 3-4 years out on getting steers back to slaughter to make up the demand. Similar issues for pork, except that china is the real pork problem. They're consuming so much pork that they're building 20+ story slaughterhouses and will continue to keep very high pressure on pork, particularly pork belly prices.

  3. Bird flu what? The last round of avian flu killed over 50 MILLION poultry animals. It's the largest outbreak in history. In the past the infection rates were only about 1/4 from interaction with wild foul. Now they're estimating as much as 80% of the infection is coming from wild foul, which would seem to indicate a much more infectious and pervasive avian flu is making the rounds. Compounded with the increased demand for eggs for vaccine production and the poultry pressure isn't going away anytime soon. Another round of avian flu and poultry might make beef look affordable. Wait for the Audubon society next round of wild bird survey to see how it's playing out in nature too.

I could go on and on there's at least another half dozen major influences including diesel price, Ukraine, worker shortage etc that are also more minor influences. Crazy part is all of them compounding at the exact same time. It's a perfect storm, and famine is now back on the menu, which means destabilizing governments as well.

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Longjumping_Aerie345 t1_ixxqk3j wrote

I agree with everything you said. But just to add some fuel to the fire. Already turning out to be a dry rainy season in CA. A few more of these and most of the central valley production of everything will be toast

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onlyrealcuzzo t1_ixyne05 wrote

Also - food prices only make up 15% of CPI.

Food prices can go up 10% - if oil goes down 10% - it cancels itself out.

Food prices can go up 10% - if "owners equivalent rent" drop by 2% - it cancels itself out.

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Excellent_Eggplant87 t1_ixy25bk wrote

No wonder beef/pork was so cheap when I went grocery shopping last week. I was surprised to see fresh expensive cuts getting 30-50% discount. I think your 2nd bullet point would explain it

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Tridentern t1_ixz78rs wrote

How do you know all of this? What do you do for a living?

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Advanced-Ad-5693 t1_ixz8nwd wrote

Restaurants and hospitality consulting. The consulting component info all of the supply chain management for different restaurant groups on programs like Foodbuy, Buyers edge and other GPOs. It has me connected at multiple points of the supply chain, from farmers and ranchers of all sizes to broadliner distributors to varying sizes of restaurant and food retailers.

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[deleted] t1_iy16ozx wrote

Dude username checks out you sound like an ad

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Advanced-Ad-5693 t1_iy19ava wrote

Eh, I get banned from a lot of forums so I'm not overly attached to a moniker. This was a random gen one that I use on most of my casual posts.

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Miranda_Leap t1_ixzvpue wrote

> Almond farms in California are a very real risk that no one is paying attention to.

Good, fuck them.

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bob_miller_jones t1_iy1jpgv wrote

My wife will still put almond milk in her coffee. $17 lattes coming to my credit card bill soon.

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Froshjjk t1_iy0yevs wrote

Fuck man I just saw a video on this I didn't think it was real

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Diamond_HandedAntics t1_iy0qnb2 wrote

You just said the same thing just with more details on why food inflation has become entrenched

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Advanced-Ad-5693 t1_iy0rxfd wrote

Not. Even. Close.

I said drought, husbandry and avian flu. You can't read for shit.

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Diamond_HandedAntics t1_iy0td2t wrote

And I said “on why food inflation has become entrenched”. Read the fucking headline, the point was entrenched food inflation not your antics on the details. Your points are valid, but so are his. Your desperate attempts to boast an intellectual superiority over people make you appear weak.

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Advanced-Ad-5693 t1_iy15x0u wrote

Fuel has a very limited effect on retail food pricing. $1500 in increased fuel costs is nothing when the trailer is pulling 40,000# of chicken. Versus avian flu tripling the price. Fertilizer cost is fuck all for a farmer compared to drought. Like I said, OP has the right idea but the wrong driving causes. Since this is a finance forum it's important to be able to delineate.

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Diamond_HandedAntics t1_iy1ydeo wrote

Well there is the flaw in your thinking, 40k lbs of chicken on a “trailer” is wholesale not retail. Before that the live chickens had to be moved. After that it is moved in bulk to be packed, then it’s moved to distribution centers then on to retail or food service. So fuel has a huge impact on food price and everything because nothing is just moved once straight to retail. Like I said your points are valid and his are to. I could go on about the other reasons as well but you trying to make your reasoning better than his for coming to the same conclusion is just arguing for the sake of arguing. Try to expand your knowledge instead of trying to be knowledgeable.

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Advanced-Ad-5693 t1_iy1yp6n wrote

Lol. It's not a huge impact even if it's repetitive. That's the part you don't seem to grasp. Fuel might add 10% at the retail level if the cost of fuel DOUBLES. Avian flu TRIPLED the retail cost. You can't tell the difference between 10% and 300%. One of us for sure.

I do this for a living, I give projections to the largest public and private restaurant groups in the US. And I have yet to miss. I predicted the massive impact in food cost and sustained supply chain woes I May 2020 and spent a year getting laughed out of the office before everyone started asking me to tell them what was going to happen next.

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Goojus t1_iy0vn7h wrote

Wow, this explains everything i was noticing in the stores. Thank you

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