By now, most of you should have been hearing about price increases that I’ve warned about for nearly six months on this blog. Every day the news on inflation and price increases gets louder and more dire. Please don’t sit back and do nothing. Stock up your pantry when there are sales and use coupons to keep costs down.
Even the CEO of Walmart came out and warned of "inflation this week. Jane O’Donnel from USAToday (March 31, 2011) wrote: “U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart's U.S. operations warned Wednesday.” “…inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."
Bloomberg’s (March 31, 2011) Nicholas Larkin wrote an article Food Commodities Rise Seen Swamping Consumers with Inflation. In it he says, “Coffee, sugar and cocoa prices will rise five- to 10-fold by 2014 because of shortages that will mean consumers getting “swamped” by food-price inflation…” He quotes Aaron Smith of Superfund Financial who said ““There’s a tremendous shortage of food, there’s a tremendous shortage of arable land,” Smith said in interview in London. “Any kind of food products are going to increase.”
Note that the article states five to ten fold. That’s not 5 % – 10%, that’s 500% to 1,000%! So if coffee or sugar costs $10, and it raises five fold, it is now $50.
Hershey has announced a 10% raise in their candy prices, according to CNBC’s Patti Domm (March 31, 2011). In her article Inflation Getting Stringer than a “Whiff” she states, “The threat of inflation is even more worrisome now that oil has crossed above $105 per barrel and looks set to stay high due to unrest in the Middle East. Some commodities have also seen shortages for other reasons and that has combined to drive prices. For instance, cocoa, trading lower Thursday, has been driven higher by civil war in Ivory Coast.”
Not only are prices rising due to our weak dollar (our dollar buys less), but global food shortages due to a variety of factors (drought, natural disasters, etc) add a sizable amount of pressure on prices. We are caught between a rock and a hard place when it comes to inflation.
So fill up your pantry and don’t forget to donate to your local food banks. There are a lot of people that are going to be needing the help more than ever.