High Prices: The Beef Over Beef

Americans like hamburgers, but maybe, not so much anymore.  The numbers are in and ground beef again, has hit another all-time high of $4.24 a pound in February.  That's twice the price of late 2009 when it was selling for $2.19 a pound.

Ground Beef Prices - Bureau of Labor Statistics

The problem with beef prices is that there is less being produced while the demand is still high.

Until demand falls, or the supply increases, prices will continue to rise. So, theoretically, cattle ranchers should want to increase production to take advantage of this.  So why do beef supplies just keep falling? This drop in supply has actually been accelerating since late 2012.  In actuality, more cattle farmers are giving up raising cattle because energy and feed prices are increasing too fast.  Also, the severe 2014 winter and the drought in the Southwest have taken their toll; but only in the last couple of years.  Additionally, some ranches have to be sold off to land developers in order to pay the government its 40% estate tax (death tax).  Often a price too high for any of the heirs to pay and still operate the ranch profitably.

The truth is that the tax policies and the cost of fighting climate change are killing the beef market.  Feed corn has become more costly due to the increased production of ethanol for fuel.  Energy prices -- especially under Obama -- have increased faster than inflation as producers of electricity move to abandon coal ahead of harsh restrictions.  The real worry for U.S. beef producers is that high prices in this country may attract an onslaught of imported beef which, in turn, could only further decimate our own beef production.   

Lastly, a crustacean alert!  Lobster, at just $2.89/lb (in 2013), may quickly replace that Saturday afternoon BBQ'd hamburger. 


References:

BLS: Ground Beef Prices: http://data.bls.gov/pdq/SurveyOutputServlet

US Beef - Bloomberg: Another Year of the Chicken: U.S. Beef Supply Will Fall Again in 2015: http://www.bloomberg.com/bw/articles/2014-11-18/us-beef-supply-will-fall-again-in-2015-chicken-demand-will-rise

Ethanol pumping up food prices - USATODAY.com: http://usatoday30.usatoday.com/money/industries/food/2011-02-09-corn-low_N.htm

Food and Electricity Prices Rise to RECORD HIGH AGAIN!: https://www.youtube.com/watch?v=AKOHJTijgsY

Cost per pound of lobster: https://www.google.com/search?q=cost+per+pound+of+lobster&ie=utf-8&oe=utf-8
 

John Kerry's Very Own Climate Gate

In 2009, the Climate Research Unit of East Anglia University was figuratively caught with its pants down wuth something that, today, is known as ClimateGate.  Several hacked emails showed there was a scientific conspiracy using falsified data in order to push the ideas of climate change and global warming.

And, ClimateGate continues today with our own head of the State Department John Kerry.

A few months ago, he said this to an audience regarding climate change and the California drought:

“This isn’t something around the corner. This is happening now...where millions of people are now experiencing the 13th month of the worst drought the state has seen in 500 years.” 

The only problem with that statement is that the current California drought has yet to even match the droughts that peaked in 1923 and 1976.  Let alone 500 years ago.

Then, Kerry is also blaming the recent flooding in California on climate change.  On December 13, he said this:

“This morning, I woke up in Washington to the television news of a super-storm rainfall in California and Washington state –-torrential, record-breaking rain in record-breaking short time. It’s become commonplace now to hear of record-breaking climate events...and we’re still on a course leading to tragedy.”

Besides the fact that Kerry is, once again, flip-flopping by claiming that both droughts and rains are a result of climate change, his facts are flat wrong.

Were there record rains in Washington State and California just recently? Yes. But, many were for that particular date and not necessarily records in the history of either of those two states.  Take Los Angeles for example.  On December 2nd (the day that Kerry was referring to) a record 1.5 inches fell.  However, it was a record that broke the previous obe of 53 years ago in 1961.  Not proof that records are falling daily because of climate change.  In fact, the worst flooding in L.A. history occurred in February 1938 when, in just two days, 4.4 inches of rain fell.

It is sad when our own Secretary of State's climate claims are refuted by facts.  It is also sad that he has been contradicted by the Obama Administration's own National Oceanic and Atmospherics Agency (NOAA) which is clearly on record as saying the California drought cannot be connected to climate change.

One of the primary reasons why I and others don't believe in climate change is because of all the lying and exaggeration that takes place.  Those like Kerry are only damaging their cause by presenting false and misleading data.


References:

 Wikipedia: ClimateGate: http://en.wikipedia.org/wiki/Climatic_Research_Unit_email_controversy

John Kerry’s Phony Climate War: http://www.nationalreview.com/article/371637/john-kerrys-phony-climate-war-rich-lowry

California Drought – Almost As Dry as 1923 and 1976:  http://sunshinehours.wordpress.com/2014/10/04/california-drought-almost-as-dry-as-1923-and-1976/

Kerry's Top Ten Flip-Flops - CBS News: http://www.cbsnews.com/news/kerrys-top-ten-flip-flops/

John Kerry: California rain is climate change: http://junkscience.com/2014/12/13/california-rain-is-climate-change/comment-page-1/

Major storm soaks Southern California: http://www.latimes.com/local/lanow/la-me-ln-storm-season-mudslides-socal-20141202-story.html

Los Angeles flood of 1938: http://en.wikipedia.org/wiki/Los_Angeles_flood_of_1938

NOAA: Climate Change Did Not Cause Calif. Drought: http://news.discovery.com/earth/global-warming/noaa-climate-change-did-not-cause-calif-drought-141209.htm

Severe Weather Events are Not Proof of Climate Change

In the last few weeks, with feet (not inches) of snow being dumped on Boston, all too many activists have leveled the claim that this is proof of climate change.  I cringe, because these people don't know what they are talking about.

In this country and, I guess around the world, people have been brainwashed into believing that weather events are the same as climate, and that somehow, severe weather events mean climate change. But, climate, as clearly defined by Wikipedia, is as follows:

"a measure of the average pattern of variation in temperature, humidity, atmospheric pressure, wind, precipitation, atmospheric particle count and other meteorological variables in a given region over long periods of time. Climate is different from weather, in that weather only describes the short-term conditions of these variables in a given region."

Weather (as noted above) is either a historical, current, or predicted measurement of meteorological conditions for a given period; typically for an hour or a day.  So, in order to have climate change, there needs to be some significant increases (or decreases) in specific meteorological measurements over a long period of time.  This, too is where a lot of climate scientists get it wrong with predictions.

To that point, there's a new website that exposes both ridiculous and contradictory climate predictions called ClimateChangePredicitons.org.   In one section of the site, called "having it both ways", it exposes some of the most contradictory public statements on climate change.  For example, in January of 2014, the people of the United Kingdom were told:

A change in the North Atlantic current could lead to the end of the soggy British summers, researchers have claimed...

 A year later, the same audience was told:

Extreme summer rainfall may become more frequent in the UK due to climate change, according to new research...

Similarly, in 2005, we were being told the oceans were becoming less salty because of melting fresh water run offs.  Three years later, research predicted the oceans would be much saltier in the future.

So, therefore, our climate isn't really changing as much as the research on climate change is changing.  No wonder that, increasingly, people don't believe the science behind the theory. 

References:

Climate: http://en.wikipedia.org/wiki/Climate

ClimateChangePredicitons.org: http://climatechangepredictions.org/

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Despite Huge Drop in GDP, Economists Still See Better Days. Really?

When it was reported that the economy shrank nearly 3% in the first quarter, most economists -- the same ones who were completely caught off guard by the downward revised 3% number -- seem
 to think its still on track to be positive; claiming that the first quarter was a one-off anomaly due to weather, lower healthcare spending, and a decline in exports. 

The problem with this thinking is that, just one day after the dismal first quarter GDP was announced, another disappointing number, consumer spending, signaled even more trouble in the 2nd quarter.  In May, the second month of the 2nd quarter, consumer spending came in at half of what those same economists were predicting, at an abysmal 0.2% percent growth.  This after, April had literally shown no growth.  Since consumer spending makes up 70% of the calculated GDP number, its hard to believe that the 2nd quarter GDP will be anything but lackluster or, worst case, another negative number; thus, signalling a recession.  If that happens, the weather can't be blamed for the lack of consumers being holed-up in their homes, not buying products or seeing their doctors.

Unless spending comes in like gang busters in June, this economy is showing the clear signs that the consumer has reached a tipping point and incomes have not kept up with inflation.  As a result, people may be putting off buying big ticket items, spending less on leisure, entertainment, other discretionary items, or even seeing their doctors less regularly because they are simply so cash-strapped that they can't afford to pay the deductibles.  As history has proven time and time again, the lack of consumer spending is a primary reasons for recession.

Therefore, should anyone believe all those "happy times" economists who now seem to think that the first quarter was just a fluke?

References:

Economists brush off dire GDP: ‘This is a blip’: http://thehill.com/policy/finance/210563-economists-brush-off-dire-gdp-this-is-a-blip

Consumer Spending in May Was Disappointingly Weak: http://abcnews.go.com/Business/wireStory/consumer-spending-02-percent-24313555

What is Economic Recession? - Definition, Causes & Effects: http://education-portal.com/academy/lesson/what-is-economic-recession-definition-causes-effects.html#lesson

Cutting Through The Fog: The Economy Shrinks By 2.9%: Recession Is Now A Statistical Possibility: http://cuttingthroughthefog.blogspot.com/2014/06/the-economy-shinks-by-29-recession-is.html

Ominous Consumer Spending Problems In the First Quarter GDP Numbers?

According to some supposedly expert economists and the White House, the economy contracted by 1% in the first quarter of 2014 because of the severe weather in those three months.  Thus, keeping consumers huddled in their homes.  Not buying the things that would have otherwise driven the economy.

But, consumers didn't stop buying in the first quarter.  Spending was actually up 3.1%.  Albeit, this was down from what CNBC said was "brisk" spending of 3.3 percent in the previous quarter.  So, its a little hard to believe that the consumer was absent due to weather.

What the report does show is something that I warned about in a previous post,  Retailers Are Signalling Economic Woes For 2014.  Despite the fact that consumer spending was up, corporate profits declined by $213 billion dollars in the same quarter.  What these contradictory facts show is that the consumer is being forced to pay higher prices for essential items like food, clothing, energy, and, especially, healthcare; thus reducing the amount of discretionary spending that would have normally driven corporate profits.

Thus, the consumer is at a recessionary tipping point where he or she can't afford to buy the kind of items that would cause the economy to expand.  This is what happens when you have a combination of stagnated wages and soaring prices for essential items like food and energy.  That is why I believe that weather had nothing to do with the first quarter slowdown of the economy, and, that is why I also believe that the second quarter will also contract; thus sending us into recession.

References:

Frigid winter takes toll as US GDP contracts for first time in 3 years: http://www.cnbc.com/id/101713801

National Income and Product Accounts Gross Domestic Product: First Quarter 2014 (Second Estimate) Corporate Profits: First Quarter 2014 (Preliminary Estimate): http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

Food prices soar as incomes stand still: http://www.cbsnews.com/news/food-prices-soar-as-incomes-stand-still/

Electricity Price Index Soars to New Record at Start of 2014; U.S. Electricity Production Declining: http://cnsnews.com/news/article/terence-p-jeffrey/electricity-price-index-soars-new-record-start-2014-us-electricity

Will ObamaCare Push Us Into Another Recession In 2014?: http://cuttingthroughthefog.blogspot.com/2014/01/will-obamacare-push-us-into-another.html