In the land of plenty, there are many unprepared souls for a sudden change in fortune.
America is remarkably unprepared for protein shortages, more supply chain disruptions, and generalized chaos due to economic and political instability. Events like wars having an impact on our society are unheard of as the last generation to experience this with food rationing has pretty much died off.
The food rationing stamps of that era are viewed by the younger generations as an anachronism, a different reality which could never happen again.
This current culture has no clue of how to unify, how to act maturely, and how to act as a true “nation” when our interests are threatened. This leads to some real concerns when economic news about agriculture and supply chain issues start to hit the mainstream media.
Enjoy Your Cheap Cheeseburger This Summer
As someone who appreciates real data, real news, and historical facts, way way back in February of this year a story appeared which should have been perceived as a major warning from the American Farm Bureau Federation:
U.S. Cattle Inventory Smallest in 73 years
This is not a good sign as this excerpt from the article highlights:
This is a bullish report. All cattle and calves in the United States on Jan. 1, 2024, were 87.2 million head, 2% lower than this time in 2023. This is the lowest Jan. 1 inventory since USDA’s 82.08 million estimate in 1951 (Figure 1). The calf crop is estimated at 33.6 million head, down 2% from last year and the smallest calf crop since 33.1 million in 1948.
Now I’m not a demographic expert but I can do some basic analysis which tells me that our population has grown substantially since 1951 and 1948. Hence, we are heading into the winter with more mouths to feed and less supply meaning a greater dependency on foreign suppliers; if they can spare it.
At a point in the very near future, people will stop using our worthless dollars because of the dilution we’ve guaranteed with our national debt. However until that occurs, the world will keep accepting our fiat insanity for their agricultural products and the smarter nations will probably demand more money versus less because of the accelerated risk and instability within the United States economically and politically at this time.
Drover’s opinon piece published by Derrell Peel from Oklahoma State University on August 5th is a perfect companion piece:
Two Scenarios for Beef Herd Expansion: Slow; and even Slower
Excerpt:
Coming into 2024, the beef cow herd is at a 63-year low – the smallest beef cow inventory since 1961. This has pushed cattle prices to record levels through 2023 and 2024. And yet, there are no indications that any beef herd rebuilding is underway.
(emphasis JGFLA)
The chart he posted on this provides some perspective:
This has direct implications on future inflationary trends, even if a recession were to begin, if it has not already as this author believes.
Prices are Stubbornly High, Poised to Jump Again
The mainstream and bubblevision media are under the delusional idea that an immediate rate cut of 25 or 50 bps by the Fed would result in an immediate jump in inflation. Unfortunately, that is not how this works as the impacts of Fed policy decisions regarding the Fed Funds Rate usually take 9 to 18 months to impact the economy in any meaningful manner.
That’s why short term commodity price analysis provides a much more realistic idea of where food inflation will impact the consumer. For example, this chart of Class 3 Milk prices for October 2024 indicates that another price increase in dairy products will hit the consumer during the autumn and winter of this year.
While that increase is stretched out over time, as herds are culled due to costs to the dairy farmer the price only has one direction to go and that is up. While it might fluctuate, it is not something over the long term, like beef prices, that can be ignored by the American public.
The biggest commodity warning in this author’s opinion is the sticky prices in Coffee, which could lead to mass postal incidents and people having to further abandon their burnt coffee flavor fetish at Starbucks.
I could go on and on about how small farmers are going under, how risks to the food supply still persist, but I think my readers get the idea.
The media, due to political considerations of course, is screaming that inflation is getting better, etc., etc., etc. to assuage the masses that life is good and there’s no threat.
What they refuse to tell the American people are the hard facts that the higher prices are now systemic, and barring an outright deflationary economic collapse will remain at these and even higher elevated prices for many years to come.
The Supply Chain Isn’t Ready
Now that we have covered the threats of inflation, shortages, problems with US agriculture, and the mismanagement of inflation by the Fed and idiots in D.C. guess what?
The so-called claims that the “supply-chain” is fixed is 100% BS.
Yes, things are going gangbusters now. One of America’s top exports in fact are empty containers back to Asia as let’s face it, India, Vietnam, and of course China can’t get enough of that quality American air. Meanwhile importers are accelerating deliveries to US ports as fast as possible this summer in the face of a potential Canadian rail strike on August 22nd and the realistic possibility of the port workers walking out in October, just weeks before the Presidential election.
One of the key websites I follow is Supply Chain Brain and I suggest those involved in planning, purchasing, and logistics follow this website if they are not already. What inspired this blog entry was a story from their website:
Extreme Weather Sends Shoppers to Stores to Stock Up, Survey Finds
This excerpt from the story and what just happened here locally with extreme flooding should trip some wires in everyone’s brain that “uh-oh, we may have a problem Houston” as the situation for the average American consumer once again demonstrates they are not as prepared for supply chain problems or natural disasters as one thinks.
Data from a recent survey conducted by inventory planning software firm RELEX Solutions, found that, despite the rise in e-commerce, 53% choose in-store shopping when it comes to stocking up in anticipation of a weather-related event. Further nearly 44% keep a larger stock of essentials at home than previously, 34% shop more frequently to avoid potential shortages, and 26% have shifted to more shelf-stable alternatives.
Retailers clearly need to adjust; only 33% of respondents reported being satisfied with retailers’ services and stock management.
The company says actions include improving demand forecasting, and optimizing inventory management to ensure the right products are available at the right time. By leveraging real-time weather data and predictive analytics, retailers can better align their stock with consumer expectations during critical weather events, potentially increasing customer satisfaction and loyalty.
Only 26% have shifted to more shelf-stable alternatives. That’s a terrifying thought if one considers what happens in a total breakdown of law and order that 3 out of 4 Americans might become roving bands looking for food for their families as even the almighty US government can not be everywhere at once.
Thus between an upcoming wave of inflation and more potential supply issues due to reduced production, my readers might want to ask themselves this one question:
Have I done everything I can to make sure my family is prepared for a situation that might last 30 days or more?
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