ArmstrongEconomics: Food Inflation on the Rise

Posted Dec 17, 2024
by Martin Armstrong
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Our models do not indicate that food inflation will ease in 2025. In fact, I have repeatedly warned that people may want to stockpile food for the next two years as there will be weather events and supply chain shortages. Our model warns that we may see another severe drought, probably between 2025 to 2027, in both the US and Canada. The drought conditions are already beginning, and this is in line with our model, which warns it will expand into the 2025-2027 period.

Walmart CEO Doug McMillon announced last week that he expects persistent high prices at the grocery store. “I don’t know what the whole year is going to look like. I hope and I think it could be better as these commodities adjust — some of them,” he said per GroceryDrive. According to McMillon, he was “disappointed” at where food inflation was currently and cited that eggs and dairy were the main problems.

Food prices shot up during the pandemic and never fully recovered. Then the was in Ukraine hurt Europe’s food supply in a major way. In America, the Food Industry Association conducted a study that revealed food inflation in America rose 25% since the pandemic, and recently rose 1.1% on a monthly basis in November.

We then have those adhering to the climate change agenda reducing farmland and available cattle. They have repeatedly stated that humans simply consume too much meat, and our diets must change to reduce our carbon footprint.

Tariffs are inflationary and always hurt the consumer and have not helped in recent years. Additional tariffs will disrupt the supply chain and cause prices to rise. Obviously this is not limited to Walmart, the grocer who perhaps sells the cheapest goods in mass. Central banks are cheering that inflation has tamed but utterly ignore the persistently high cost of basic necessities like food.