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May 01, 2011

Oh It's On: People Can't Afford Bacon Because Of Rising Costs Tied To Government Policies

Revolutions have been started over less.

Hog producers are running up prices and lowing their margins because geniuses in DC had the bright idea to turn food and feed stock into energy.

Bobbie Jean Pope, the 81-year-old mother of C. Larry Pope of Newport News, Va., can't afford her bacon.

"I said, 'Mom, I'll get you some bacon.' And she goes, 'I can't afford y'all's meat anymore! Why is y'all's meat so expensive?' And I said, 'Mom, you ought to understand why it's expensive—it's 'cause our costs are so expensive.'"

Mr. Pope is the chief executive officer of Smithfield Foods Inc., the world's largest pork processor and hog producer by volume

...Some "60 to 70% of the cost of raising a hog is tied up in the grains," Mr. Pope explains. "The major ingredient is corn, and the secondary ingredient is soybean meal." Over the last several years, "the cost of corn has gone from a base of $2.40 a bushel to today at $7.40 a bushel, nearly triple what it was just a few years ago." Which means every product that uses corn has risen, too—including everything from "cereal to soft drinks" and more.

What triggered the upswing? In part: ethanol. President George W. Bush "came forward with—what do you call?—the edict that we were going to mandate 36 billion gallons of alternative fuels" by 2022, of which corn-based ethanol is "a substantial part." Companies that blend ethanol into fuel get a $5 billion annual tax credit, and there's a tariff to keep foreign producers out of the U.S. market. Now 40% of the corn crop is "directed to ethanol, which equals the amount that's going into livestock food," Mr. Pope calculates.

The rapidly depreciating dollar is also sparking inflation, although Mr. Pope says that's a "hard" topic for him to discuss, trying to be diplomatic. But he doesn't deny that money is cheap. Investment bankers are throwing cash at the firm—a turnaround from 2008, when money was scarce—even though Mr. Pope doesn't need it right now.

Read the rest. It's only going to get worst.

I found this story via Nathan Wurtzel who notes...

Here's why Obama and the Soros-Podesta Complex are talking about Trump. They don't want you talking about this

Ben Bernanke can keep telling people not to worry about his running the proverbial printing presses overtime but you can't hide the cost of staples from people. They are going to believe their shrinking pay checks (if they still have one) over the garbled words of some guy in DC.


digg this
posted by DrewM. at 03:03 PM

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