retail news in context, analysis with attitude

Articles in the Wall Street Journal and USA Today look at the same story this morning but from different perspectives.

The Journal writes that the US Department of Agriculture (USDA) is saying that “farmers intend to idle millions of acres of land this spring as they cut production of most of the nation's major crops, including corn, wheat and cotton, and plant far fewer acres of soybeans than widely anticipated.

“The retreat by recession-battered farmers -- the broadest in two decades -- is helping to set the stage for more volatility in prices of the crops used for everything from packaged food and biofuels to fattening livestock. The nation's major food brands were battered last year by gyrating crop prices in part because several companies made bad hedging decisions.

“In a sign of what food executives fear is to come, crop futures prices leapt Tuesday on worries that any weather problems this summer could result in supply disruptions next year.”

USA Today notes in its lead the same cutback in planting, but immediately notes that “industry experts say consumers should not expect a big jump in prices at the grocery store.” An increase of three to four percent in the consumer price index for food is expected this year, according to the report.

KC's View:
Not much that retailers and manufacturers can do about this, except that they need to be alert that rising prices in this economic environment is only going to fuel consumer discontent and cause even greater cutbacks in spending.

I don't know about you, but I grow increasingly dubious when I hear people talk about an economic turnaround by the end of this year. I hope I’m wrong, but I keep thinking that with almost every passing day there is more bad news…and that there are doors still to be opened that we don't even know exist yet.