The Guardian is reporting that Tesco’s chairman, the UK’s largest grocer, is expecting food inflation of a whopping 5% for 2022.
“In some ways the worst is still to come – because although food price inflation in Tesco last quarter was only 1%, we are impacted by rising energy prices. Our suppliers are impacted by rising energy prices. We’re doing all we can to offset it … but that’s the sort of number we’re talking about. Of course, 5%,” he said.
The Guardian
The problem isn’t limited to the UK, the New York Times is reporting that food inflation is becoming a serious concern to many people but the poor being impacted the hardest.
The I.M.F’s data shows that average food inflation across the world reached 6.85 percent on an annualized basis in December, the highest level since their series started in 2014. Between April 2020 and December 2021, the price of soybeans soared 52 percent, and corn and wheat both grew 80 percent, the fund’s data showed, while the price of coffee rose 70 percent, due largely to droughts and frost in Brazil.
The New York Times
While the current problems are caused by a plethora of issues such as supply chain, logistics disruptions and change in eating habits, the longer term problem for farmers is depletion of labor in rural areas as more people migrate to city centers. In Demographics: Farmers, Boomers and Business, we covered the growing rural labor depletion by reviewing the BLS data and encourage prudent investors to review the information.
Smart business investors are aware of the trend and are starting to do something about it as noted in a report from QZ.
Walmart wants to bring the farm closer to the store. The retail giant said today that it is investing in Plenty, an indoor vertical farming company, and will sell leafy greens from Plenty in its 280 California stores later this year.
QZ.com
As inflation persists, energy prices and labor cost climb, it will be necessary for the major city centers to begin growing their own foods through vertical farming. As retail malls and office buildings become abandoned to the new remote work model, they would make for great facilities to install vertical farms.
Stay tuned, stay solvent, and stay satiated