Farmers Hit Hard by Price Increases as Food Price Spike Looms The Sun Bay Paper Page 6 Goods and services around the country are becoming increasingly more expensive, but farmers may be among the hardest hit as inflation, supply chain issues, and Russia's invasion of Ukraine are expected to send food prices soaring even higher. That impact is being felt by farmers around the country. “The cost of fertilizer is up as much as 500% in some areas,” said Indiana Farm Bureau President Randy Kron. “It would be unbelievable if I hadn’t seen it for myself as I priced fertilizer for our farm in southern Indiana. Fertilizer is a global commodity and can be influenced by multiple market factors, including the situation in Ukraine, and all of these are helping to drive up costs.” Ukraine is a significant supplier of both crops and fertilizer materials, adding to the concern that the invasion will likely lead to shortages and price increases. Fertilizer prices for nitrogen, phosphorous and potassium, called NPK, have exploded since December 2020. “Because of the seasonal aspects of … this agriculture industry, it takes about six to nine months for the impacts felt in the impact market to really work its way through the supply chain and reach the consumer,” said Nathon Carson, head of supply chain operations for Chemical Dynamics, a multi-million dollar fertilizer supplier based in Florida servicing 12 states. “The crazy thing is, fertilizer prices for NPK, especially nitrogen, the most important nutrient, went up by about … doubled essentially in Q4 of 2021, which means we are not really going to see those impacts until this coming summer.” That fertilizer price increase is one of several factors expected to push food prices up even higher this year. “Food prices are going to continue to go up dramatically,” Carson said. “I was expecting food prices to go up about 10% in the U.S. before midterms, so around August, another 5 or so percent to follow by the end of the year …You could see 20% food price inflation by the end of the year in the U.S. That is a possibility. You won’t see famine in the U.S. Our food system is very, very resilient, but you will see shortages. You won’t have the same product selection that you’re used to.” These food price issues have only been egged on by runaway federal spending, which has helped send inflation soaring in the past year. The Bureau of Labor Statistics reported last week that the Consumer Price index, a leading marker of inflation, rose 7.9% in the past 12 months. BLS said that the food price index rose 8.6% over the last 12 months, the largest 12-month spike since April 1981. “Inflation has hit agricultural inputs such as fertilizer and equipment, which will contribute to the increasing cost of food,” said Chris Hagenow, vice president of Iowans for Tax Relief. “Inflation is dangerous because it is a hidden tax and it destroys the income earned by both farmers and workers. This inflation is a direct consequence of the out-ofcontrol spending that is plaguing the federal government. Our national debt has hit $30 trillion and President Joe Biden and the Democrats believe that spending and printing money has no economic consequences. Farmers and consumers will continue to see higher prices and it will damage the economy.” BLS found that in February, those price increases hit all kinds of foods on grocery store shelves. “The food index increased 1.0 percent in February as the food at home index increased 1.4 percent over the month,” BLS said. “All six major grocery store food group indexes increased in February. The index for fruits and vegetables had the largest increase, rising 2.3 percent, its largest monthly increase since March 2010. The index for fresh fruits increased 3.7 percent over the month, and the index for fresh vegetables rose 1.3 percent. The index for dairy and related products rose 1.9 percent, its largest monthly increase since April 2011. “The index for meats, poultry, fish, and eggs increased 1.2 percent in February as all of its major component indexes increased,” BLS added. Kron said the problem isn’t going away anytime soon. “The problem has been developing for several years, so unfortunately, the solution will take time, too,” he said. “Farm Bureau is urging the Biden administration to look for ways to bring fertilizer prices down, including resolving supply chain issues and removing import duties. These rising input costs will have a major impact on all of us this spring as we prepare to put crops in the ground and they will eat away much of the profit we might have expected to make from higher commodity prices.” Casey Harper The Center Square March 18, 2022 - March 24, 2022 A few years back, Eric and Donna Reed shopped for groceries and household products just once for an entire year. How on Earth? I know. That was my reaction, too. The Reeds got the idea after reading a column in USA Today wherein the writer confessed to his weakness when it came to buying clothes. So driven to buy new sweaters, slacks or shoes every time he stepped inside a clothing store, he publicly announced he was giving up buying anything for one full year. Eric and Donna wondered if they could do the same. Their minds went to grocery stores and discount stores, the mall and Amazon. And what about restaurants and home improvement stores? they pondered. How would they handle gifts and seasonal items every household needs through the course of a year? The Reeds, like most of us, don't simply stop at the store to pick up milk. Or eggs. No, they buy the milk — along with a basket of other stuff. It's expensive to be a frequentbuying consumer. But could they plan ahead well enough to make it through a whole year without spending? They decided to see if they were up for it by trying it for one month: one month with no exceptions, not even gifts. Could they do it? They bought supplies for the month and then gritted their teeth. They reported that the first two weeks were smooth sailing. It was exciting to approach life like pioneers. They were self-sufficient and resourceful. But by week three, they were drinking powdered milk and making creative salads, as the lettuce was gone. In week four, Donna ruined her last pair of pantyhose and opted to wear pants to work to finish out the month. Just when they were ready to give up on this crazy notion, they tallied the results. They'd spent less than half of what they normally spent in a month's time. Wow. Imagine that: They cut their overall expenses in half! Could they expand this way of life to three months? They could, and they would. But not without some strategic planning. They calculated how much toilet tissue, cleaning supplies, dry goods, meat and other food staples they would need for three months based on past usage. And then they contemplated what you've been wondering: What about milk and produce? Gasoline? And what if they really want a meal out, or a drive-thru experience? Their compromise: gift cards. They bought a strategically planned number of $10 gift cards for their favorite drivethru, gas station and supermarket, and put the cards in a safe place. Making it for three months was not nearly as difficult as they worried it would be — even with Thanksgiving landing in the middle of that time period. They'd planned ahead with a turkey in the freezer. By the time the three-month period was ending, they were asking themselves: Can we make it a year? Soon they were plotting a big onetime-only buying spree for the week after Christmas, when lots of things are on sale. The Reeds did complete a full year without spending, and the fringe benefits were astounding. They put the initial purchase on a credit card but paid it off within three months. Over the next nine months, they were able to pay off all of their unsecured debts with the money they were not spending. They finished the year with only their mortgage debt. And all because they went a year without buying anything. Could you go a year without spending? What about three months? One month? One week? How about a day? Mary Hunt Could You Go a Year Without Spending?
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