It's Worse Than You Know
March 16, 2022 | View PDF
Even big media outlets have been forced to acknowledge inflation is a big problem. It’s sad those running our country are so disconnected from the people they govern that they’re unable to understand how devastating our current wealth-evaporating economy is.
The latest official core inflation figure I saw was 6.4 percent, the highest since August 1982. This is misleading as it’s an average across a range of categories that don’t even cover all of the necessities of life Americans pay for every day. The core inflation rate does NOT include food and energy (gasoline), areas in which the average American is seeing some of the largest price increases. With those factored in, the core inflation rate is 7.9 percent and increases in food prices alone are costing the average family of four more than $200 a month more than a year ago. But gas prices are what will destroy life as we knew it.
Karen and I drove to Belle Fourche, SD, over the weekend as we do twice a month for me to preach in the church I’ll be pastoring after our farm sells. Even using her fuel-efficient RAV 4 cost us nearly $40 per fill at the pump. A month ago it was less than $30 per fill. And I’m rationing trips to Sidney from my farm near Gurley in my truck to one a week because of gas prices, unless the trip can’t be avoided.
While in Belle Fourche we dined with a rancher and his wife. They have a large cattle operation on properties in both South Dakota and across the border in Wyoming, about 15 miles west. It’s calving season, so the man drives back and forth a few times a day to check on cows and calves. He also has to feed them. Increases in fuel and feed costs in recent weeks have been insane, and will impact his bottom line this year – hard. Ask any farmer or rancher around here what the current economy is doing to their ag operation. I suspect you’ll learn that some wonder how long they can keep going.
Then there are truckers hauling farm and ranch products to food companies, and more truckers taking them from there to your grocery store. Those truckers have a choice. Take the hit and try to stay in business or pass the increased cost to their clients, who must then make a similar decision about passing costs to consumers. I’ve seen one projection stating food prices will increase another 25 percent this year, but some companies are deciding to take the shrinkflation route.
Shrinkflation is where a little less product is put in the package at the store in order to keep the price the same. Frito-Lay announced last week it will be putting five less Doritos in each package to keep prices where they are, for now. Others have been doing this for a while. Does that bar of soap in the box look smaller these days? Is that roll of toilet paper a few sheets thinner?
The combination of inflation and shrinkflation will be hitting us all hard this year. And will continue to do so until we clean our political houses and repopulate them with nonpartisan innovators more concerned about solutions than political power and personal wealth.