Farmers and fuel prices OH MY!

Just off of yeasterdays post direct … from todays herald tribune

Back in Willmar, Willis is quick to point out that farmers like him pay much of their revenue right to their suppliers. He has been told to expect the price of the liquid propane that runs his corn drier to be 30 percent higher than last year. The cost of fertilizer could double. The price of diesel fuel for his tractors rose nearly one-quarter last year and has risen further since.

Food prices in the United States rose about 4 percent last year, the fastest rate since 1990, according to the U.S. Department of Agriculture. Prices on some foods rose much faster. The price of white bread rose 13 percent last year, bacon 7 percent, peanut butter 9 percent. And food inflation is picking up speed, running at an annualized rate of 6.1 percent as of April, the Bureau of Labor Statistics reported May 14.

Meanwhile, a weakened dollar makes U.S. produce less expensive abroad even as poor harvests in some foreign countries have generated regional scarcities. Countries with emerging economies like India and China are creating nations of consumers demanding higher-quality in ingredients and food.

The rising prices are forcing changes at food makers like Kraft Foods, which saw its commodities costs rise last year by 9 percent, or $1.3 billion. This year, Kraft expects to see an even bigger increase in its costs, and it is raising prices across the board. But it is also changing some product packaging to save money, switching its classic Miracle Whip jar from glass to plastic, for instance.

Like I said food prices are going to skyrocket… Just watch

Stay warm, stay safe and save money

John

So what’s your take?

Tagged as: farmers, food, fuel prices, grain