91–100 of 1001 posts
A lot of the inflation on food is increasingly feeling like businesses cashing in. For instance my old go to brand of breed increased by over 50% months ago.
Scroll to page 9 for a good graph on how this works. Unit profits are massively up, unit labour costs stagnant.
Demand for food is inelastic, so it makes sense that companies are raising prices as high as possible since people still have to eat. Generally this leads to price competition from other food brands, but when single companies own dozens/hundreds of food brands it’s easy to act like a cartel and keep prices high.
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, where it does look like there may be some gouging going on, but we'd need to see their profit reporting to be sure:
https://accountable.us/wp-content/uploads/2023/02/2023-02-10...
> This saw select fruit and vegetables rationed in UK supermarkets, due to shortages caused by bad weather conditions in the South of Europe and Northern Africa and many growers having to cut back due to rising costs of heating greenhouses. Besides the obvious degradation of the energy and fertilizer markets from the war in Ukraine, the collapsed Pound is probably the biggest factor here.
Not really, the biggest factor is how supermarkets source their produce in the UK.
Earlier quoted context omitted.
Brexit plus war.
Brexit plus sanctions. War has nothing to do with that, at least not war in a classical sense. Economic or total war that some countries are involved in can be considered as a major reason.
A lot of the inflation on food is increasingly feeling like businesses cashing in. For instance my old go to brand of breed increased by over 50% months ago.
For some reason they didn't want to cash in before?
The core problem is that Western countries have collectively decided to dial back anti-trust enforcement that could have stepped in.
> This saw select fruit and vegetables rationed in UK supermarkets, due to shortages caused by bad weather conditions in the South of Europe and Northern Africa and many growers having to cut back due to rising costs of heating greenhouses. Besides the obvious degradation of the energy and fertilizer markets from the war in Ukraine, the collapsed Pound is probably the biggest factor here.
Not really, the biggest factor is how supermarkets source their produce in the UK.
Even for things that can be domestically produced, like greenhouse tomatoes, they will still be more expensive even if they are now competitive with imports. And for items like rice and couscous you're not really going to be able to domestically produce them anyway.
Earlier quoted context omitted.
They didn't have the pricing power/their customers didn't have the tolerance for rising prices/coordinated action and corporate consolidation means prices are going up and it doesn't matter what your choices are. Circumstances materially changed over the last few years, and inflation is a great time for profit taking as we're seeing, which reinforces the inflation. In a competitive environment the excess profit-takin…
I don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg? > They didn't have the pricing power/their customers didn't have the tolerance for rising prices/ Just for everyone's sanity, it's WAY easier to believe that there are underlying market conditions that should be addres…
There's some empirical evidence from Australia that this is exactly what they did. Also an island nation that heavily imports food
https://www.theguardian.com/business/2023/feb/24/an-economic...
Earlier quoted context omitted.
Brexit plus sanctions. War has nothing to do with that, at least not war in a classical sense. Economic or total war that some countries are involved in can be considered as a major reason.
My understanding is the Russia and Ukraine both contribute meaningful portions of the global food supply. Wouldn't destabilizing these two countries affect food prices globally?