Even though central banks all over the world have been raising interest rates in recent months, food prices just continue to go up. There are a couple of reasons why this is happening. First of all, demand for food is very inelastic. In other words, no matter how high or how low prices go, people are still going to need to eat. So even if the Federal Reserve sent interest rates into the stratosphere, people would still need to go the supermarket to get food for themselves and their families. Secondly, we are facing some severe long-term supply problems. As I have detailed in previous articles, food production is being significantly hindered in a number of different ways, and that isn’t going to change any time soon. There simply is not enough food to feed everyone on the planet, and supplies are only going to get tighter in the months and years ahead. No matter what central banks do, this is going to push food prices steadily higher.
But even though higher interest rates haven’t had much of an impact on food prices, we knew that they would dramatically affect western economies in many other ways. Economic activity is starting to dry up all over the western world, and as I discussed the other day, Europe has already plunged into a recession.
In addition, higher interest rates have burst the global housing bubble, and here in the United States we have entered what will ultimately become the greatest commercial real estate crisis in our entire history.
On top of everything else, hundreds of small and mid-size banks are now struggling to survive because higher rates have blown giant black holes in their balance sheets.
After seeing all the damage that they have caused, officials at the Federal Reserve finally decided to “pause” their interest rate hiking campaign on Wednesday…
Federal Reserve policymakers left the central bank’s benchmark interest rate unchanged despite inflation that has run above its target for over two years, saying the pause would allow it to gauge the effects of earlier hikes on the economy.
The Fed said on Wednesday that it would hold its benchmark rate at a range of five percent to 5.25 percent, the range it set at its May meeting and the highest since the Fed cut rates at the summer of 2007. At the same time, the Fed signaled that it expects to hike at least two more times this year.
If they had any sense, they would start cutting rates.
But that probably won’t happen for a while.
The good news is that higher rates have crushed economic activity enough that the overall rate of inflation has started to come down…
Overall, consumer prices increased 4% from a year earlier, down from 4.9% in April and a 40-year high of 9.1% last June, according to the Labor Department’s consumer price index.
Of course you have to take those numbers with a grain of salt.
If the inflation rate was still calculated the way that it was back in 1980, it would still be well into double digits right now.
And when you look at core CPI, it has “barely budged” over the past year…
And when you dig into core CPI, the news isn’t nearly so good. In fact, it’s downright bad.
Core CPI, excluding food and energy prices, rose 0.4% month-on-month. On an annual basis, core CPI rose by 5.3%.
To put that number into perspective, the core CPI increase in May 2022 was 6%. That means the increase in core CPI has barely budged.
That is very troubling.
And what is even more troubling is the fact that food prices in the U.S. just continue to go up…
But what the data also revealed is that food prices continue to increase. According to the new government data, food at home prices went up 5.8% for the year ending in May. For food away from home, prices have jumped 8.3%.
Once again, it is important to remember that the way inflation is calculated has changed dramatically over the decades.
If food inflation was still calculated the way that it was back in 1980, those numbers would be way into the double digits.
And even with all of the massaging that they do to the numbers these days, there are certain categories of food where the official numbers that we have been given actually show double digit inflation on a yearly basis…
Frozen vegetables (18.7%)
Frozen drinks (15.8%)
Bread (12.5%)
Fats and oils (11.8%)
Candy (11.6%)
Cakes, cookies and cupcakes (11%)
Baby food and formula (10.1)
The cost of living has been escalating much faster than our paychecks have, and this is putting enormous financial stress on American families.
Thanks to the rapidly rising cost of living, more U.S. adults than ever are being forced to find a “side hustle”…
As many as two in five adults in the U.S. have a side hustle, according to a recent Bankrate survey of 2,500-plus adults, backing up LendingTree data from earlier this year that found side gigs are up by 13% over the past two years and recent Deloitte data that found more millennials and Gen Zers are adding on part-time jobs. Younger workers are more likely to need an extra job: 53% of Gen Zers and half of millennials have one, Bankrate finds, compared to only 40% of Gen Xers and 24% of baby boomers.
It’s a reflection of the state of the economy, which has left many Americans—even those earning six figures—feeling like they’re living paycheck to paycheck. At the end of the day, side hustles have become a necessity for many who are struggling to compete with the pace of inflation and trying to save amid recession fears.
And food inflation is also one of the reasons why demand at food banks around the nation has been absolutely exploding in recent months.
For example, just check out what is happening in one area of Oklahoma…
Food banks across Green Country are seeing a spike in the number of people using their services.
Two issues are at play: it’s more expensive to make ends meet because of inflation and emergency SNAP benefits are ending.
Just since March, the food bank said there’s been a 50-percent increase in people who need help.
Unfortunately, this isn’t just happening in the United States.
In fact, food inflation is a much bigger problem over in Europe right now…
Whether in Spain, Hungary, or Italy, food prices keep rising in Europe even as inflation relents. Food inflation reached a historic peak in March, up 19.2% over the previous year, and fell to 12.5% in May. Governments across the continent are trying to come up with solutions: Spain waived its 5% tax on food products, France reached a three-month pricing agreement with supermarkets, and Croatia mandated price controls.
But the interventions don’t seem to be sufficient, and even staples or typical products are affected. In Italy, the price of pasta has surged by 14% in the past year, twice as much as overall inflation, and the nation’s tables are paying a steep price for higher energy costs following Russia’s invasion of Ukraine, along with the resulting wheat shortages.
All over the world, food prices are moving up faster than wages are.
And the outlook for global food production in 2023 is not promising.
Sadly, this is just the very beginning of this crisis. In my latest book I spend several chapters detailing a number of nightmarish long-term trends that are going to absolutely crush global food production during the years to come.
No matter what our leaders do now, global famine is inevitable.
We aren’t able to feed everyone in the world right now, and global food supplies are only going to get tighter.
But most people don’t understand the long-term trends that we are facing.
Most people just assume that the “bumps in the road” that we are currently facing are just temporary and that everything will be “just fine” in the long run.
Don’t be one of those people.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Article cross-posted from The Economic Collapse Blog.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
