We're posting this because of who said it, not because we agree (at the moment).
I wouldn't call for a change in direction for the price the consumer pays until the end of March at the earliest, when the U.S. planting intentions report comes out. If it looks as though prices farmers receive are going to be significantly lower they might decide en mass to grow hemp (or its cousin). Additionally, the prices of the major inputs, from fuel to run the tractor to fertilizer to, for produce anyway, the cost of labor are not easy to tease out at the moment.
Finally there is the realization in the back of the reptile brain that weather conditions on a global scale have been have been pretty good for the last two decades and the risk of simultaneous crop failures in any two of the Northern Hemisphere breadbaskets, Northeast China, the U.S., Ukraine or Russia could cause serious problems. Throw in the fact that India is now the world's leading rice exporter and you have another area to keep an eye on.
On a positive note the southern hemisphere majors, Brazil and Australia look okay but as always, we shall see.
From Bloomberg via Advisor Perspectives, December 16:
A food price surge propelled by supply chain snags, weather woes and pent-up demand is coming to an end, said the top executive of one of the world’s largest agricultural companies.
“We’re going to see some cresting and perhaps some prices that will start to come down,” Cargill Inc.’s Chief Executive Officer Dave MacLennan said Wednesday in a Bloomberg TV interview, citing the cyclical nature of commodities for part of the easing. “I’m optimistic that we’re going to see a stabilizing and perhaps even a reduction in some prices.”
Prices for foods including beef and chicken have soared in the wake of the Covid-19 pandemic that initially shuttered production plants and prompted a surge in buying at grocery stores. Some of that supply chain pressure is easing as output rebounds.
Despite MacLennan’s expectations of easing food prices, the CEO said broader worries of higher overall prices remain with the dialogue on inflation now being more permanent than “transitory” -- a position he advocated three months ago in a previous Bloomberg TV interview.
“Clearly I was wrong, it’s here to stay,” MacLennan said of higher inflation. “Everyone’s talking about that and everyone sees it.”
MacLennan, who oversees one of the largest meat processors in the U.S., cited continued supply chain disruptions and labor shortages as reasons behind his inflationary view....
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