PSA - Higher Food, Beef Prices Incoming ... stock your freezer

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Costco disagrees with the Federal Reserve on the future of inflation

Brian Sozzi Brian Sozzi·Anchor, Editor-at-Large Tue, June 1, 2021, 6:37 AM

Retail giant Costco may be offering the clearest signs yet that the current inflationary spike the U.S. is experiencing as the economy emerges from the grips of the pandemic will be anything but transitory as countless Federal Reserve members continue to trumpet.

"Chips shortages are impacting many items from an inflation standpoint, some items more than others. And with regard to containers and shipping, transportation costs have increased as well. This will continue — the feeling is that this will continue for the most part of this calendar year," warned Costco CFO Richard Galanti on the company's latest earnings call. Continued Galanti, "We've had a lot of questions about inflation over the past few months. There have been and are a variety of inflationary pressures that we and others are seeing.

Inflationary factors abound. These include higher labor costs, higher freight costs, higher transportation demand, along with the container shortage and port delays, increased demand in various product categories, various shortages of everything from chips to oils and chemical supplies by facilities hit by the Gulf freeze and storms and, in some cases, higher commodity prices." Galanti pointed to particular inflationary pressure in beef, paper goods and aluminum foil. Signs of red-hot inflation are abound at the moment.

The core personal consumption expenditure (PCE) price index increased faster than expected, up 3.1% in April, according to the U.S. Commerce Department. Federal Reserve officials view the index as among the best indicators of pricing pressure in the economy. The Fed believes 2% inflation is a healthy level. Meanwhile, the April Consumer Price Index (CPI) rose at the fastest pace since September 2008, clocking in with a 4.2% increase versus a year ago.

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One-Fifth of U.S. Beef Capacity Wiped Out by JBS Cyberattack

Fabiana Batista, Michael Hirtzer and Elizabeth Elkin
Tue, June 1, 2021, 2:03 PM

(Bloomberg) -- A cyberattack on JBS SA, the largest meat producer globally, has forced the shutdown of some of world’s largest slaughterhouses, and there are signs that the closures are spreading.

JBS’s five biggest beef plants in the U.S. -- which altogether handle 22,500 cattle a day -- have halted processing following a weekend attack on the company’s computer networks, according to JBS posts on Facebook, labor unions and employees. Those outages alone have wiped out nearly a fifth of America’s production. Slaughter operations across Australia were also down, according to a trade group. One of Canada’s largest beef plants was idled for a second day.

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