4 ms·

Some of it is from greed. Inflation is 8.5% but almost all the major food producers have raised prices by ~15%.

HFguy 4y ago
A lot of commodity inputs into food production are up way more than 8.5% (e.g., corn, wheat). And a lot of the farmers inputs (e.g., energy, fertilizer) are up more than 8.5%. The 8.5% is a weighted, blended average of a lot of things. So it could be reasonable that if you were selling bread, that the price would need to go up more than 8.5%. The question is whether their profit margins are up? I don't know.
- QuarterReptile 4y ago
  >The question is whether their profit margins are up? I don't know. I would naturally expect companies to hold larger profit margins when there is instability. Setting up a business with low profit margin in a volatile business environment would be like building a house on a concrete slab right next to a river that often overflows its banks.
- Ekaros 4y ago
  Actually considering the price of wheat from price of bread even 10% increase probably isn't too much. But that doesn't mean there hasn't be similar cost increases in other parts of the chain from commercial bakeries to store and transport.
gruez 4y ago
Isn't that a tautology? In a basket of goods there's almost certainly going to be something that's inflating above average. That means you'll always have some sector (that's inflating faster than general inflation) to blame for "greed".
QuarterReptile 4y ago
Were the food producers not being greedy before those price increases as well? I don't understand.
namelessoracle 4y ago
Some of this could be trickle down effects no? If inflation is 8.5 percent and the seed company raises prices by 9 percent (rounding up cause they arent really sure what inflation actually is), the fertilizer company goes up 9 percent, the tractor parts goes up even more (cause supply chain shortages), and the harvest contractors rates have to go up 9 percent, and the distribution that gets the harvest to the producer goes up 9 percent, what does the final price look like? Has there been analysis like that?

A lot of commodity inputs into food production are up way more than 8.5% (e.g., corn, wheat). And a lot of the farmers inputs (e.g., energy, fertilizer) are up more than 8.5%. The 8.5% is a weighted, blended average of a lot of things. So it could be reasonable that if you were selling bread, that the price would need to go up more than 8.5%. The question is whether their profit margins are up? I don't know.

QuarterReptile 4y ago
>The question is whether their profit margins are up? I don't know. I would naturally expect companies to hold larger profit margins when there is instability. Setting up a business with low profit margin in a volatile business environment would be like building a house on a concrete slab right next to a river that often overflows its banks.
Ekaros 4y ago
Actually considering the price of wheat from price of bread even 10% increase probably isn't too much. But that doesn't mean there hasn't be similar cost increases in other parts of the chain from commercial bakeries to store and transport.

gruez 4y ago

Isn't that a tautology? In a basket of goods there's almost certainly going to be something that's inflating above average. That means you'll always have some sector (that's inflating faster than general inflation) to blame for "greed".

QuarterReptile 4y ago

Were the food producers not being greedy before those price increases as well? I don't understand.

namelessoracle 4y ago

Some of this could be trickle down effects no? If inflation is 8.5 percent and the seed company raises prices by 9 percent (rounding up cause they arent really sure what inflation actually is), the fertilizer company goes up 9 percent, the tractor parts goes up even more (cause supply chain shortages), and the harvest contractors rates have to go up 9 percent, and the distribution that gets the harvest to the producer goes up 9 percent, what does the final price look like? Has there been analysis like that?