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Comment by khuey | Hacker News Reader

If you drill into the data you can see that large portions of the measured inflation are driven specifically by sectors like automobiles which have known pandemic-induced supply chain problems.

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If everything has supply chain problems leading to rising prices for long enough that it results in rising wages.. isn't that just inflation?

I've heard this take before, and it's not wrong that a few sectors are driving it, but it's not super relevant imo.

The top comment is proposing that the supply chain issues are not the cause of inflation, that's the issue. Unless printing more dollars is what broke the supply chain then they're not directly related.

It's inflation yes but the solution isn't tweaking monetary policy, it's fixing the supply chains.

But why is my grocery bill 40% higher than it was 2 years ago? We have bought the same basket for years.

The official CPI for "Food at home"[1] rose 10.6% in the past two years, so that accounts for a quarter of the difference. As for the rest, my guess it's a combination of your numbers not being reflective of the nation-wide average, your basket subtly changing (ie. buying more premium goods), and you spending more on "food at home" because you no longer go out to eat.

[1] https://fred.stlouisfed.org/series/CUSR0000SAF11

The chip shortage can affect farms. Their new pick up or tractor might cost 40% more

There is also a big labor shortage. If you're in the U.S a lot of your basket is coming from California. In 2020 H2A visa holders (farm workers) were payed $14.77/hr. In 2022 its $17.51/hr

What happens when you can't even get the Visas? You start approaching American locals, who want much more per hour than a Visa holder. They actually want a living wage

This whole labor shortage +inflation thing to me just means - people are figuring out how much it actually costs to make what you consume, when employees aren't treated like garbage

Our local Cheesecake Factory won't sell any food that isn't pasta or cheesecake due to shortages in necessary ingredients. The grocery stores in my area (Portland, Oregon) have inconsistent inventory -- lots of some things, practically zero of others. And some I don't really understand -- I had to go to three different stores to find heavy cream a week ago. WTF?

I expect this disruption is driving a lot of the spike in grocery prices.

The cheeses shortage (cream, yougurt, etc) has been blamed on a cyberattack in October.

>In October, a cyberattack against the largest US cheese manufacturer contributed to a nationwide cream cheese shortage shortly before the holidays, Bloomberg News reported, endangering holiday treats for millions. Bloomberg reported the attack targeted plants and distribution centers. As a result, Wisconsin-based Schreiber Foods was unable to fully operate for several days — just as it was heading into its peak busy period before the Thanksgiving, Hanukkah and Christmas holidays. The company is one of the country's largest marketers for dairy products, including cheese slices, yogurt and the all-important cream cheese, with annual sales of more than $5 billion.

https://www.cnn.com/2021/12/18/business/cream-cheese-cyberat...

WTF, I live in Portland and the only supply chain issues I see are that WinCo is the only place I can get diet orange soda at.

What the heck are you talking about? I've seen heavy cream in literally every grocery store I've gone into. Supply chains for food are not screwed there.

Two days ago at least Whole Foods here (SE Portland) was pretty messed up. No meat, almost no butter, produce bins were cleared out, some brands of yogurt were gone, etc.

New Seasons was better, so maybe just an Amazon thing. But that’s at least one screwed up supply chain

I'm glad you've had a better experience than me. I only checked the two closest Fred Meyers and Safeway, not Winco.

Plenty at Trader Joe’s in CA.

Have you been to a Fred Myers recently? It's amazing how much stuff in the meat and dairy sections are not available anymore.

I keep a monthly accounting of my grocery costs (along with all other expenses) in a spreadsheet. I haven't seen my grocery bill increase by anywhere close to 40% over the past two years.

edit: My bill went from ~$600 to ~$650 using a 4 month window rolling average.

Does that account for shrinkflation?

Personally I have noticed I now alter the foods I choose to buy because of the high prices. I am buying more staples and trying to cut costs because the price of seemingly everything besides dairy and chicken(when you can find wings that is) has gone up.

I'm personally observing a similar increase (a little less than 10%) in my monthly grocery bill. Virtually nothing I purchase has been affected by shrinkflation. The only notable exception is paper towels.

Due to dietary restrictions my basket has remained mostly unchanged for years. Every grocery trip is basically vegetables, meat, brown rice, milk, cheese, and cooking oils or spices if needed.

This seems to be an ~8% increase, in line with the numbers from the linked article.

Why omit your actual increase?

Just added it.

In part because of consolidation in the industries relating to food.

https://www.nytimes.com/2021/12/27/business/beef-prices-catt...

In this example the price paid to ranchers for beef hasn't risen all that much but the end user price has increased drastically. That the meat processing industry has 4? companies controlling 80+% doesn't help.

Why didn't the lack of competition result in higher prices before COVID?

I don't know, but it seems like farmers negotiate contracts in advance, so if futures prices are driven up by speculators using easy money then there will be a period of time where farmers are selling for less than they otherwise could because they negotiated futures contracts. Isn't the whole point of the futures market to provide farmers with stable prices, not optimal prices?

I buy exactly the same things every week and my grocery bill has gone up 25% in the last 12 months.

> But why is my grocery bill 40% higher than it was 2 years ago?

Massive widespread crop failure. https://www.bakingbusiness.com/articles/54799-usda-confirms-...

There is a lot of monopolistic control in the food industry, allowing them the ability to increase prices indiscriminately in response to increase salary (not necessarily more demand)

You didn't account for the hedonic adjustments, yeah those Oreos cost more than last year but they have pumpkin flavor now!

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