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UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

grocerygazette.co.uk

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Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#691

Post by rpmason »

I believe that we can make a small dent on this problem if we improve the technology that runs greenhouses. (My bias: I work for a startup that is working on this and I'm kind of obsessed with the industry.)

Here is what current greenhouse tech looks like: a human (called a grower) uses their intuition to adjust hundreds of settings that parameterise what the actuators should do in different circumstances. For example, 20 settings might parameterise a 'ventilation setpoint line', which determines what air temperature the vents should start opening at given a measurement of the solar radiation intensity from a weather station. All the different actuators (heating pipes, vents, screens, misting systems, irrigation systems) have their own set of heuristics that need to be adjusted by hand..then beneath that a low-level control layer (e.g., PI control) manipulating individual motors/valves.

It's crazy but the grower has to manually adjust the settings as the weather, energy prices and crop state changes. With better software/automation we can improve the control of the environment within the greenhouse and thereby increase yields [kg/m^2] and minimise energy costs.

If the farmers are producing more tomatoes per m^2 for the same input costs they can afford to sell them to consumers (via supermarkets) at lower prices and still make money. It won't solve all the problems but would be a step in the right direction.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#692

Post by dragonwriter »

random_upvoter wrote: post #264

There seems to be a widely accepted and unchallenged consensus that political power is unable to address inflation. Maybe it ain't necessarily so? In 1971 Nixon froze prices and wages by executive order. But these days the political world seems oddly submissive to whatever the market wants to do. https://en.wikipedia.org/wiki/Nixon_shock

> There seems to be a widely accepted and unchallenged consensus that political power is unable to address inflation.

Political power can address inflation, and it can mitigate the effects of inflation on the less well off. These are, however, often opposed goals.

E.g., massive taxes on the working class with no added spending would kill demand-driven inflation, but also make the non-rich worse off.

OTOH, downward redistribution by spending (possibly coupled with high end taxes) would mitigate the low-end effects of inflation, but increase the magnitude of conaumer price inflation.

> In 1971 Nixon froze prices and wages by executive orde

Price controls create black markets, but usually do not control effective prices.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#693

Post by TheOtherHobbes »

solveit wrote: post #573
cool_dude85 wrote: post #497

Earlier quoted context omitted.

>By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three. Says who? Why can't the people producing stuff simply take lower profit margins instead?

Prices lower than the market-clearing price necessarily mean rationing or empty shelves. If you have a hundred potatoes and two hundred people, lowering prices just mean some people won't be able to buy at the low price.

If you have a hundred potatoes increasing the prices means many people won't be able to afford them and those potatoes will be wasted.

Increasing the cost of potato supply, with - for example - extortionate energy and fuel prices means the potatoes don't get grown in the first place.

This is exactly what's been happening in the UK.

Literally.

Not I-read-this-in-an-econ-textbook hypothetically. But for real in the stores.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#695

Post by pessimizer »

RhodesianHunter wrote: post #633
Nifty3929 wrote: post #454

Earlier quoted context omitted.

The lower class does suffer the most, but unfortunately it is the policies intended to help them which actually cause most of the problem. By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three. The solution to allowing lower classes to have more stuff is to make it easier for everybody to produ…

>By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three. Completely inaccurate. Giving people money that came from taxes does not increase the money supply. Giving people money that came from selling bonds does not increase the money supply. Only printing money increases the money supply.

It's the household finance mental model of national accounting that won't go away.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#696

Post by onlyrealcuzzo »

titzer wrote: post #116
simonh wrote: post #92

Earlier quoted context omitted.

If wholesale food costs have gone up and they're simply passing that on then they may not be making any more money. Here's wholesale food prices in the US: https://fred.stlouisfed.org/series/WPU578101 In fact you'd expect reduced sales from the higher prices to put pressure on profits. That is what seems to be happening in the UK: https://www.grocerygazette.co.uk/2023/01/31/food-companies-p... But not in the US, wher…

It's both increased wholesale food costs and price gouging. Profits have never been higher all along the board. Everyone in the chain is "passing the cost on" and also taking a little extra cut.

Profits have never been higher means nothing if dollars have never been lower.

What are profits like adjusted for inflation?

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#697

Post by rcarr »

dukeyukey wrote: post #393
rcarr wrote: post #330

Earlier quoted context omitted.

In the UK it is very hard not to look at it this way. Unlike the US and other countries, Covid stimulus was very much aimed at maintaining the status quo: there were no flat amount universal basic income style checks handed out to everyone as in the US - instead you got put on 80% furlough and had a large part of your salary paid for by the government. This basically meant the rich got ever richer whilst doing no wor…

> that is why the UK is being hit harder by inflation than any other country in the western world I don't think that's true. Right now, UK inflation is lower than almost any European country east of Germany, including Sweden, and it seems inflation was running lower throughout COVID than even the US.

Please send me links if you've got any because this is conflicting with what I have been reading so it would be nice to have a more balanced view if this is the case.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#698

Post by TheOtherHobbes »

rabite wrote: post #663
Nifty3929 wrote: post #454

Earlier quoted context omitted.

The lower class does suffer the most, but unfortunately it is the policies intended to help them which actually cause most of the problem. By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three. The solution to allowing lower classes to have more stuff is to make it easier for everybody to produ…

[flagged]

You can't quote the Daily Mail and expect to be taken seriously.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#699

Post by somenameforme »

RhodesianHunter wrote: post #633
Nifty3929 wrote: post #454

Earlier quoted context omitted.

The lower class does suffer the most, but unfortunately it is the policies intended to help them which actually cause most of the problem. By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three. The solution to allowing lower classes to have more stuff is to make it easier for everybody to produ…

>By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three. Completely inaccurate. Giving people money that came from taxes does not increase the money supply. Giving people money that came from selling bonds does not increase the money supply. Only printing money increases the money supply.

The main driver in inflation is monetary velocity - the rate at which money is exchanging hands in the market. Increases in monetary supply almost invariably lead to increases in monetary velocity, so the two are generally equated - but this is not strictly necessary. If I gave you a quadrillion dollars tomorrow, and you chose to simply keep it under your [rather large] bed, but otherwise continued living as you do - then obviously no inflation is going to happen, even though you just increased the monetary supply quite substantially.

So while one could nitpick some points about the specifics of government actions in relation to the monetary supply, even if we take all of your points for granted - there would almost certainly be inflation proportional to the amount given. The only way there would be no inflation is if this action didn't increase monetary velocity.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#700

Post by nradov »

somenameforme wrote: post #662
theturtletalks wrote: post #590

Earlier quoted context omitted.

His argument is that the government can do 2 things: 1. Interest-free money for businesses to launch, grow, and advance. This leads to more goods in the market and thus lower prices 2. Free money straight to the people which means more money in the market and thus, inflation, empty shelves, etc. His general point is that having interest-free money keeps existing players honest since newcomers can come in and start a…

The US has had extremely low interest rates for a very long time, and yet effective competition is further than ever in many industries. Something I'd observe is how unreasonably difficult it can be to legally sell things in the US. For instance hitting on this topic (of food prices), why can't I simply start baking bread and selling it? You can make an amazing loaf of bread for a tiny fraction of what people pay in…

There is always a tension between economic growth and consumer protection. Selling bread is hard mostly due to health regulations. We used to have a lot of people die due to contaminated food. Now that's so rare that it makes the news when it happens. Food safety rules were written in blood.

Some states such as California do have special exemptions for "cottage" production of low risk foods such as bread.

https://www.cdph.ca.gov/Programs/CEH/DFDCS/Pages/FDBPrograms...

In other industries it's much easier to legally start selling things. Want to make screwdrivers and sell them to the local hardware store? Go ahead.

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