Read full text: https://www.lewrockwell.com/2025/03/no_author/bad-news-comes-in-small-packages/
The food industry has, for years, gotten by on a retail markup as low as 2% on most items. Also, suppliers are demanding three-day payment turnarounds in order to get by. In addition, the local warehouses that most supermarkets once maintained are largely gone. Supermarkets now rely on semi-weekly deliveries from wholesalers to keep the shelves full. There’s minimal backup supply.
What all this means is that the food industry, from the producers to the wholesalers, to the retailers, has no wiggle room left. At this point, the industry resembles a boxer who has given up and dropped his hands and is just waiting for the knockout punch.
It will come as no surprise to the reader that inflation is increasing due to dramatic government spending. In the last ten years, more currency has been created than in the previous 230 years put together. Dramatic inflation is unavoidable.
If significant inflation were to occur in any given month, food industry profits would be eliminated for the month. This now happens periodically in the industry, but it’s recoverable the following month. (The next shipment is marked up enough to cover inflation, and while the profit for the month in question is never recovered, the industry survives.)
However, if a mere three consecutive months of significant inflation were to occur, we might expect to see the lights going off in supermarkets across the country. Those that are the most heavily in debt would go first. They’d be followed in the following months by others for as long as the inflation trend continued.
If any nation were to lose suppliers and retailers in, say, shoes or washing machines, shortages would occur, and we would simply adjust. Our old shoes would go to the cobbler rather than being thrown out. We’d call the washing machine repairman if we couldn’t go to the appliance store and buy a new one.
But food is different. It’s the one product that must be replaced immediately. We cannot simply postpone our need for food for a period of weeks or months.
A decade ago, when I wrote that food shortages would take place in the coming economic crisis, unsurprisingly, few people took the notion seriously, as the warning had been made so early. But those shortages have now begun. They’re not yet serious, but we’re now seeing the warning signs.
