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IPFS News Link • Economy - Economics USA

Why Food Inflation Is Only Getting Started

•, by Capitalist Exploits

It's worth remembering that because farmers pay upfront and only recoup their expenses at the point of sale/harvest months later, all the opex they've experienced has a lag.

This lag is dependent on produce but certainly, we're looking at a tsunami of food inflation 12 to 18 months out.

Then there is the fuel and fertilizer. You'll hopefully recall our bullish call on both fuel and fertilizer in order to play the entire food cost explosion that is now kicking off. Fuel and fertilizer together are the two largest input costs to farmers, typically exceeding in aggregate 50% of their total costs.

Fertilizer has tripled and in some cases quadrupled. What are governments doing to "fix" this? Playing with interest rates. How cute!