The Producer Price Index for Finished Goods advanced 1.3 percent in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S.Department of Labor reported today. This increase followed a 0.6-percent decline in January and a 0.9-percent rise in December. At the earlier stages of processing, the intermediate goods index turned up 1.1 percent after falling 0.7 percent in the previous month, and prices for crude goods climbed 8.9 percent following a 6.3-percent decrease in January.
Food increased 1.9%. They rose 1.5% in December and 1.1% in January. In the year before they would occasionally spike 1.1%, but never with gains like we have seen for the past three months. Let's look at some future's charts, because they tell an as-of-yet untold tale. Agricultural prices are spiking.
Weekly Wheat Chart:
Feed Wheat Weekly:
Each of these charts has about 2 1/4 years of information, so we're not looking at seasonal price fluctuations (which futures were originally designed to help ameliorate). We're looking at damn big price moves in agricultural prices. Don't expect the food component of PPI to come down anytime soon.