Thank Putin for our tumbling food prices
The Russian president's ban on US chicken imports is resulting in a feast of lower grocery bills for American shoppers.
Grrr! Why does all news have to be presented so negatively? Last week, Vladimir Putin may have done the most positive thing he could for American consumers' wallets: He banned U.S. chicken imports. Immediately, the outpourings were negative. The Washington Post pointed out that the ban is "also starting to negatively affect a number of U.S. food industries," particularly chicken. We send $300 million in chickens to Russia every year. The chicken industry? Is that the real ramification for something that is eaten by tens of millions of people in this country? The pain in the chicken farmer's budget?
This Putin-hurts-chicken-farmers story is a classic example of how a huge positive gets turned by the press into something dastardly. Do you know that ever since Putin put this through, the price of all of our foodstuffs have been in virtual freefall? Do you know that hog futures, which had been soaring not that long ago, are now tumbling the maximum amount allowed and are back to where they were on March 18? Do you know that the stubbornly high price of cattle is now crashing as a new Putin-inspired chicken glut has made poultry too competitive? Two weeks ago, we thought cattle could only go up in price. No more.
It's a Putin windfall, and we'd better start acknowledging it as such and not fret about poor chicken farmers.
We are now in the midst of a wholesale retreat in prices for virtually every commodity I follow, save cheese. Grains, hogs, cattle, poultry -- they are all getting hammered. The building blocks of the American diet are tumbling in price. Which brings me back to a bigger point: the impact of chicken on Fed policy and the ideologues who bash the Fed out of anger or profit.
Think back to June 18, when Janet Yellen said inflation was on the high side but it was a little "noisy." The bond market intelligentsia -- which has forever favored higher interest rates even as the economy was dying on the vine -- immediately lambasted her for being naive and unwilling to admit that inflation had gotten not just troublesome but on the verge of running away.
What has happened since then? How about declines in just about everything that goes into the end price at the supermarket? Plus, this wholesale retreat -- which is really the level it is happening at for now -- is occurring simultaneously with a most unexpected decline in gasoline despite the summer driving season and geopolitical turmoil. That's how big the U.S.-created worldwide glut really is.
How about the big decline in natural gas, which right now is lowering that air-conditioning bill? How about the very big slowdown in the rate of home price increases we caught in this week's figures? How about a decline in mortgage prices we are getting with this relentless bond price increase?
Looks like Fed chief Yellen nailed it perfectly with that "noisy" comment about inflation, even though she surely wasn't counting on the help that Putin gave her. She gets no credit for being right, of course, because she is considered soft on inflation and therefore lightweight.
I have been building a thesis that a decline in inflation isn't being taken into account positively enough by the stock market. I have been suggesting that when the price of gasoline goes down as it has while rates have come down and purchasing power increases, it means more money for consumers to spend. But now I am realizing that I am thinking too small. The whole commodity-consuming industry, the consumer packaged goods business, is now beginning to get a windfall.
It may not be able to offset the rising dollar, but it's powerful and it's real and Putin just gave us the last piece of a very positive new puzzle. Numbers will soon be going higher, not lower, for commodity consumers at the corporate and individual levels. Chicken farmers? Sure, they may be hurting. The rest of us? It's all good.
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Maybe he could also ban our beef too. Steak is pretty high right now.
Hey Putin, get cracking! You're really scaring us now, so keep it up!
Falling prices for food? At my local grocery store, bagged salad greens just went from $1.99 to $2.49, and the size of the bag went to 4 ounces from 5 ounces. A 25% increase in price and a 20% decrease in the package size? How's that for "noise"? It appears that both Yellen and Cramer are delusional.
haven't seen lower prices at my supermarket yet.
What are you talking about MSN? Just because you claim it, doesn't make it true. More poor journalism
Dear Putin, thank you for getting something lowered in this country as our current president is inept and unable to do what you have done. I fully understand that what you accomplished for the US citizens is a by-product of something else but thank you anyway. Please, keep helping in these ways as our current administration has been absent for 6 years and we are getting desperate for the hope and change that was promised us.
So Putin won"t buy chicken from America. That means that our chickens will be sold to a foreign nation and then be sent to Russia under a different name.
After we put a grain embargo on grain to Russia it was sold to other countries and then sold to Russia.
And all this didn"t lower our prices of bread here. The price went up.
Same thing here. The traders will gain and we will pay.
"Do you know that ever since Putin put this through, the price of all of our foodstuffs have been in virtual freefall?"
This was my vote for biggest exaggeration of the day until Little Beav showed up.
2013 Total USA Poultry Exports---$5.8 billion
According to this article Russia banned $300 million of USA poultry exports to Russia. Some of that available poultry will be sold to Americans and some will be sold to other countries. No reason to think you will see big long term price decreases because of Russia. In the long run, the price of poultry will be affected more by the fluctuations in the price of feed, fuel and competing meats.
If they closed McDonald's in Russia..? The same thing would happen there, as what would happen here...
People would riot in the Streets...And hospitals would be loaded with fast-food withdrawl addicts.
Maybe we should do an Air-drop of Chickens over eastern Ukraine and Russia...As good will.
I "really thought they could fly"...
shades of WKRP, circa 1970-80s..
They are suffering too. High prices and less stuff to go around.
No need to cry like a chubby little girl used to have her way, instead let's find other markets and compete with excellent quality at an affordable price. Food is food, people can not do with out it.
Not even the Russians..
We can talk about wholesale prices dropping until the "cows come home" or the "chickens roost".
The key factor is the word "sale"...
We spend very little on groceries...There are only two of us, but we do entertain sometimes.
We eat very well...And a varied diet..
We spend almost as much on Pet foods..
We both cook...And eat out, or pick something up occasionally, but not often.
We do not clip coupons, but usually do take advantage of Senior's discounts.
We stock up on sales or discounts and store or freeze extra items, can save 25-35% sometimes.
We shop at only about 3 places...And buy bread and bread items at the "day old store" (usually).
I believe being a "smart shopper", taking advantage of sales and discounts and making "fewer trips" to the stores saves a lot on food bills...Storing, freezing and canning, drop costs too.
Buying extra when in season helps a lot also..
Buy it then or on sale, if you are going to eat it; Is the smart thing to do..
Most everything will store at least 6 months up to a year, "longer if stored/froze properly".
We have eaten, sweet corn, berries, peppers, tomatoes or sauces; 5-10 years old that were delicious. Sometimes stuff gets lost in the freezer.
And because of the way we shop, we seldom notice rises in pricing, except maybe meat.
Or pet foods.
As for russian chicken bans ...Poland and Belorussias orders will likely increase and said dead chickens will have to cross a border hidden in the back of a truck !!
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