No Inflation Anywhere, Except Here

04/22/2014 7:00 am EST

Focus: COMMODITIES

Moby Waller

Editor, Wyatt Research

With US inflation running well below the Fed’s targeted 2% goal, Moby Waller of BigTrends.com examines one area where inflation is going up.

There's been some media attention in recent days about the fact that beef prices have risen to multi-year highs—articles discussing how the price of a good steak is rising dramatically, for example.

But there is additional food inflation going on currently in a wide variety of areas—and this is the kind of inflation that affects the majority of people directly, and one which the Fed seems a bit oblivious about in their reported price inflation data. Also affects the restaurant and packaged goods industries—some more than others.

Just for example, see the following five charts: (the first four are from zerohedge.com, the fifth is from wsj.comand is only a projection of price increases).

Beef Prices Chart

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Pork Prices Chart

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Shrimp Prices Chart

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Egg Prices Chart

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Produce Price Rise Projections

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There are different factors/explanations involved in why each of these different markets are rising—drought, disease, etc.  It's not just the above mentioned commodities, for example, the Coffee ETF (JO) is up huge this year.

JO Daily Chart

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As far as ETFs that directly move with these types of food-related agricultural commodities, investors and traders can look at UBS CMCI Food Total Return Index ETF (FUD), (but keep in mind that is lightly traded). The more widely known PowerShares DB Agriculture ETF (DBA) is also up big in 2014 so far. Ditto for iPath Grains ETF (JJG).

DBA Daily Chart

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And that is not even mentioning other non-food commodities that have rallied in 2014, such as crude oil (USO) and natural gas (UNG). Even gold (GLD) is higher this year.

While there's a variety of things we could write and comment about all of this—for the active investor and option trader the most relevant point is: there's always a bull (and bear) market somewhere.

Moby Waller, Co-Portfolio Manager, ETF Tradr Program & Rapid Options Income, BigTrends.com

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