Groceries Up 12.5% in 15 Months, BLS Says "Nah"

LOS ANGELES, Jan 24 (Reuters) – McDonald’s Corp plans to raise prices this year to help offset an expected rise in its grocery bill for the 10 commodities that account for around 75 percent of its food preparation costs.

Whom do you trust more, the BLS or Ronald McDonald?  Well, I never did like clowns, but at least Ronald never lied to me.

A recurring theme here on TRB is how pathetic the official stats are versus what anyone running a household sees when calculating the cost of living.  My friend Kalpa at Big Picture Agriculture highlights a recent article that shows just how far apart the government’s food inflation measures are from reality…

Today, inflation and food inflation articles are everywhere in the news. But, the recent article that got my attention was from The Tennessean about a food basket survey that they did earlier this month. They found a 12.5% spike in prices for a typical grocery basket filled with staples compared with November 2009. Ouch.

According to a study done last year, Americans spent 10% of their income on food in 2009. As I continue to note, although the reported food inflation figure by the BLS was 1.5% for 2010, according to the same report, the rate of inflation for meat, poultry, fish and eggs was up 5.5 percent and dairy was up 3.7 percent. Beef is up 6.2% from 2009.

Take your BLS data and deep fry it for all I care, it has no bearing on what we are actually spending to keep food on the table.  I know that Whole Foods is an extreme example, but I bought an apple there for two dollars this weekend.  One apple.  Apples should be free for Americans who can trace their ancestors back to the Apple Tree War of 1915, in which 700 brave souls gave their lives at MacAllister’s Orchard when the Macedonians invaded Washington State.

But take solace in the fact that we’ve rescued the big banks with endless zero interest rates.  They’re the real heroes, after all.

Sources:

McDonalds Likely to Raise Prices in 2011 (Reuters)

Rising Food and Energy Costs Here in the U.S. (Big Picture Agriculture)

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Here Come the Price Hikes (TRB)