Cattle Network Warns Farmers: Big Time Inflation Is Coming and You Better Have an Explanation

The insiders know, they see it coming. A spike in food prices is just around the corner. Here's what Drovers Cattle Network is telling farmers:

Americans have spent less than 10 percent of their disposable income on food for many years now. That’s about to change. Food prices are on the rise and there will be new records set for some, actually many goods, this year. Meat, dairy and poultry prices are among the products on pace to set records.

While the general inflation rate was nearly zero in 2010, food and fuel presents another story. Predictions for 2011 food inflation range from 3 percent to 6 percent, with some estimates in recent days pushing into the double digits.

This will come at a time when gasoline and energy prices also are on the rise—oil is projected to reach beyond $100 per barrel....Consumers will see higher prices in the supermarket and hear about record commodity prices and will perceive you as riding waves of money.

Part of this is the current supply and demand dynamics for food products, but it is also the Ben Bernanke printing press. It's going to be a perfect storm of events pushing food prices much higher. DCN is talking about 3 percent to 6 per cent inflation, but I think it will be over 10 percent. It's going to be pretty ugly out there. And some will blame the farmers. DCN is telling farmers:

News stories are already outlining this year’s higher food prices. In recent days, I’ve seen coverage on ABC, NBC, cable news and a National Public Radio business show. Still, nothing drives the point home like actually feeling it in your wallet, and that is yet to come in a significant way. I believe consumers are in for some sticker shock, and they’ll wonder what the heck has happened.

They will point to “big, greedy, modern farmers.” Never mind that globally, there are 1 billion more people to feed than in the 1990s, as well as more who’ve upgraded their previous diets.

My point is with rising food costs on the horizon, consumers will again look at farmers with jaundiced view. So, polish up your talking points about the reality of farming, finances and food production today and be prepared to explain the truth to consumers in a calm, thoughtful way.

If you have a big freezer, fill it with meat right now.