"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

The Required Disclosures

The information presented in this blog and its individual articles is provided for informational use only and should not be considered investment advice or an offer for a particular security. The contents reflect the views and opinions of the individual writer as of the date the article was written and do not necessarily represent the views of the individual writer on the current date. They also do not in any way, shape, or form represent the views of the Firm Never-To-Be-Named. Any such views are subject to change at any time based upon market or other conditions and The Great Redoubt and its individual writers disclaim any responsibility to update such views. These views should not be relied on as investment advice, and because investment decisions for any security are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any contributor to The Great Redoubt. Neither The Great Redoubt nor any individual author can be held responsible for any direct or incidental loss incurred by applying any of the information offered. Please consult your tax or financial advisor for additional information concerning your specific situation.

Wednesday, January 5, 2011

Food: More Expensive, Still Not Core

The Food Prices Indices are out from the Food and Agriculture Organization of the United Nations. The overall Food Price Index climbed 9 bps to a level of 215 in December. Meat[1] climbed 1 bps to 142, dairy[2] remained flat at 208, cereals climbed 15 bps to 238, oils and fats climbed 20 bps to 263, and sugar climbed 25 bps to 398.
Yes, you can accurately think of those increases as the actual average worldwide change in prices. Meat increased 0.01% in December, cereals increased 0.15%, and so forth. It also means that the food price index increased 41 bps (0.41%) in 2010, with meat prices up 22 bps, dairy prices down 8 bps, cereals up 68 bps, oils and fats up 94 bps, and sugar up 22 bps.
JP Morgan's downgrade of Safeway on concerns that rising food costs will eat away at profits seems more and more well-founded.
[1] Weighted average of 3 poultry meat quotes, 4 bovine meat quotes, 2 pig meat quotes, and 1 ovine meat quote.

No comments:

Post a Comment