WARNING! Food prices to more than double (150%+) in 2 years? Predictions...
I am fortunate enough to live in an area where I'm surrounded by gorgeous farmland and woods. Since I regularly walk my dogs along the perimeter of one of the large fields adjacent to my house, naturally I asked permission of the farmer to do so. Two- to three-times per year, we run into each other when he stops to inspect his fields, and yesterday was one of those days. What he had to say about his fertilizer prices is worse than I thought! More below...
If you've been to the grocery store lately (of course you have!), you've noticed that the price of just about any food item has increased on average by 25%. For example, those little french bread loaves I love to buy at Walmart for $1 are now $1.29. The price of cat and dog food has, at the very least, doubled over the last several months. Nearly everything has gone up in price, and Americans' monthly food bills are already putting the pinch on their standard of living.
But, what would happen if food prices increased by another 100% (that is, doubled), or worse yet, 150% (2.5X)?
According to my neighboring farmer, his cost for fertilizer has increased from $400,000 last year, to over $700,000 this year. That's over 75%. We didn't even discuss the increase in seed cost, labor, gas/fuel for all of his vehicles, and so on.
How will this translate into food price increases? Interestingly, over the next 10-12 months, even after this Fall's harvest, we should see a relatively modest increase in consumer food prices (another 40% is what I 'see'), so these dramatic increases in farming costs won't be reflected right away.
Instead, I would expect to see a more dramatic increase in prices in late 2023 when stored/warehoused reserves from previous years are exhausted, and the government runs out of funds to offset increases. At that time, we will, in my estimation, see prices DOUBLED over current prices! They'll continue to increase another 50% very quickly after that!
If this happens, that $1.29 loaf of bread at Walmart will be $3.23 by the end of 2023-early 2024!
Of course, this data is from my mind's eye tapping into the 'realm of all possibilities'. I could develop a more complex predictions model using a collection of data that takes into account fuel costs, production costs, storage/reserve levels, increased money printing, and so on, but it would take me hours. This is just so easy for me to 'see'!
For now, my best advice is to take sensible measures to prepare for the high probability of 'skyrocketing' food prices. It just makes simple, common sense that this trend won't magically reverse itself anytime soon. Prepare yourselves!
Oh, and one more bit of bad news from my farmer friend. His brother (in his mid-60's) took his third jab and within days went totally blind, despite having no pre-existing condition, and no genetic disease that could lead to such an outcome. Sadly, it appears to be permanent.