Food inflation is driving us crazy
In 2011, we have already seen the highest food inflation in years. The worldwide “Great Recession” has caused food to stay low until this year when prices escalated in the first quarter at a disturbing rate. The second quarter inflation on food slowed dramatically but I believe that is just a temporary situation.
Our Government has been printing an awful amount of money throughout this recession. We have been spending much more than we take in from taxes and that can only go on for so long until the markets put us into reality. Sadly, that process has begun as the USA lost its AAA financial rating and the dollar is losing its value at an alarming rate.
The weak dollar will allow foreign countries to buy our production of food products more affordably which will increase demand and lower supply causing inevitable price raises. This will affect our most prized food products the most. I had a good example of this occur as I write this. Sable, also known as “Smoked Black Cod,” is an item prized by our friends in Japan. This wild fish is caught in the cold Alaskan waters and is a key item in our Delis. Our delis prepare smoked fish trays for the Jewish holiday,Yom Kippur. Last year, prior to the holiday, Sable was $18.00 a pound. This rose to $23.00 a pound just prior to Yom Kippur and then this week rose to $28.50 a pound! After removing its skin and bones, the cost of Sable now costs $40.00 a pound! Obviously we do not expect to sell much this year.
Areas that I expect to see the most inflation are in our delicacy items such as King Crab, Jumbo Lump Crab, Lobster, Shrimp and Prime Beef. Depending on world harvests, we could also see huge jumps in wheat, corn and soybeans which would cause incredible food cost increases as these items are the core of all food production.
While I hope I am wrong about this inflation, I doubt that this will be the case.
