Food Industry is 'Crazy and Wild' as Costs, Prices Rise, Says Stew Leonard's CEO

Stew Leonard Jr, president and CEO of grocery store Stew Leonard's, said that grocery store owners don't want to raise prices on consumers, but that the landscape of high fuel and food prices has made it tough to maintain profit margins.

The International Monetary Fund warned that the US-Israeli war against Iran threatens a “global, yet asymmetric” shock, dimming the outlook for economies that were just recovering from previous crises.

Countries in Africa and Asia that are heavily dependent on oil imports are already finding it increasingly hard to access needed supplies, “even at inflated prices,” the world’s financial firefighter said in a blog post published on Monday.

“All roads lead to higher prices and slower growth,” the IMF said. The ultimate impact on supply chains and infrastructure will depend on whether the conflict proves a short or long one, the fund said, adding that “the world may settle somewhere in between — tensions linger, energy stays costly, and inflation proves hard to tame — with ongoing uncertainty and geopolitical risk.”

Beyond the energy disruption, higher food and fertilizer prices are affecting some countries from the Middle East to Latin America, with low-income economies at risk of food insecurity, the IMF warned. The interruption of crop-nutrient supplies from the Gulf comes just as planting season begins in the northern hemisphere, threatening harvests through the year.

People in low‑income countries are most at risk when food prices rise because it accounts for about 36% of their consumption on average, compared with 20% in emerging market-economies and 9% in advanced economies,” the IMF said in its post, written by economists including Tobias Adrian and Jihad Azour.

“That makes any spike in fertilizer and food prices not just an economic problem but a socio-political one, especially where fiscal resources to cushion the blow are limited,” it said.  Treasuries were little changed in US trading after economic data showed steady hiring and consumer spending on goods, offsetting the prospect of an end to the war in Iran that could pave the way for Federal Reserve interest-rate cuts.

Yields were back near Tuesday’s closing levels after rebounding from the lowest in more than a week, reached amid a drop in crude oil benchmarks, which has partially reversed. Treasury yields tracked a war-related surge in oil prices for much of the past month because of their potential to stoke inflation and delay Fed rate cuts.

Wednesday’s rebound in yields initially tracked oil prices, then gathered pace after two US economic data releases. February retail sales exceeded economist estimates, as did ADP Research’s estimate of March private-sector hiring. Fed policymakers cut interest rates three times last year in reaction to signs of job-market weakness that have since abated somewhat.

“We had a relief rally from yesterday’s development on the conflict in the Middle East; on the other hand the data are pretty broadly coming in firmer than expectations,” supporting higher yields, said Jan Nevruzi, an interest-rate strategist at TD Securities. The cohort of Fed policymakers that sees energy prices as having “limited impact on inflation but a drag on growth that further softens the labor market” is “a little more suppressed right now.”

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