The Watchlist
General Inflation
Last week, PPI was cooler than expected while core CPI was a slightly above expectations. Consensus calls for a 25bps hike to Fed Funds rates in May, at which time the Federal Reserve may or may not pause.
Food Inflation
Will it fall further in 2023?
Food was 8.5% more expensive in March than a year ago, down from a reading of 9.5% in February and below last summer’s peak of 11.4% last summer. Grocery prices were up 8.4% in March y/y vs. 10.2% in February, however food eaten away from home rose 8.8% in March, up from 8.4%. Bakery products saw some of the biggest price increases (think wheat). Cereal prices rose 13.6% year over year in March, while cookies were 16.6% more expensive in March than a year ago. The price of frozen baked goods rose 16.2% in March over the previous year.
More Insurance Losses
18, 000 cows killed in an explosion and fire at Texas dairy farm may be largest cattle loss ever. Property insurance rates were already firming, this event further supports rate increases for U.S. agribusinesses.
Upcoming Events / Economic Reports
All Week
- Numerous public company EPS reports for 1Q 2023
- House and Senate hearings related to the U.S. farm bill.
Monday, April 17
- USDA Crop Progress
- Empire State Manufacturing, NAHB Housing Index
Tuesday, April 18
- Building Permits and Housing Starts
- LMIC Conference begins in Omaha, NE
Wednesday, April 19
- EIA Weekly Ethanol Production and other energy data
Thursday, April 20
- USDA Weekly Export Sales, U.S. Bioenergy Statistics
- Conference Board Leading Indicators, Phila Fed Manufacturing, Initial Jobless Claims, Existing Home Sales
Friday, April 21
- USDA Cattle on Feed
- S&P Global Manufacturing and Services PMI
Beyond
- FOMC Meeting – May 2-3
- Debt ceiling negotiations
- Sources: Barron’s, Trading Economics, USDA Agency Reports Y Charts, (https://ycharts.com/indicators/regions/countries/USA)
Numbers of Interest
$30 Billion
Amount spent on legal marijuana products in 2022 by U.S. consumers; compares to $7.9 billion for craft beer (Source: Morning Brew and MJBizDaily.)
$525 Billion
Reported amount paid to local, state and federal tax authorities by legal immigrants working in the United States during 2021 (source: Marketplace Morning Report)
16.8%
% of consumers financing a new vehicle with a car payment of $1,000 per month or more, according to Edmonds, compared to 10.3% in 2022 and 6.1% in 2021.
-29%
% decline in global personal computer (PC) shipments during 1Q 2023 according to IDC, as COVID WFH demand reverses.
67%
% of the state of Florida experiencing moderate-to-extreme drought conditions (prior to last week’s rain storm), up from 21% in 2022.
66 cents
Expected new cost of a First Class Stamp charged by the U.S. Postal Service, up 32% from pre-pandemic levels.
The U.S. Treasury Yield Curve
Although Treasury yields have increased over the past month (blue line) they remain inverted, which signals “recession.” The spread between the 10-Year and 3-Month note has widened to -1.62 basis points (bps) as of Friday from -1.13 bps on March 17.
Source: Y-Charts.com
Kenneth Scott Zuckerberg is Lead Industry Analyst, Grains, Farm Supply & Biofuels, CoBank.
