ounting the days until eviction.
Because he's now going to be paying more for his beer. A lot more.
The price of hops, an integral ingredient in beer making, has soared from $4 a pound to $40. The cost of booze is going up. So even in the bottom of a beer glass it's hard to find any solace.
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And this is just the latest of the problems facing Americans
Last week U.S. unemployment claims rose 10% to 407,000. That brings the total to 2.94 million, the highest figure since July 2004. Meanwhile, payrolls shrunk by 80,000 in March, with 48,000 jobs going in manufacturing alone. That's worrying, given that one of the major benefits of the weak US dollar is that it should be helping their exporters. Clearly, nothing is going right on the other side of the Atlantic.
The biggest rise in food prices in 17 years
And Americans now have another thing to worry about. Soaring food prices. Since January 2005 the average price of a loaf of bread in the U.S. has risen 32%. Overall, US retail food prices rose 4 % last year, the biggest jump in 17 years, says the US Department of Agriculture. They're predicting another 3-4% rise this year, with eggs, chicken, beef and fruit all beating inflation over the past year in terms of price increases.
Meanwhile restaurant owners have been even harder hit, with wholesale price increases of 7.4%. That's the biggest jump in nearly three decades, according to the National Restaurant Association. It's no surprise then that more and more Americans are turning to charity to keep their bellies full. America's Harvest, which gives out almost two billion pound of food and other grocery products every year to more than 200 banks across the US, says that its overall client base rose 20% in the fourth quarter of 2007. Americans are feeling the pressure, on their wallets and their stomachs.
"As financial markets have tumbled, food prices have soared," said Robert Zoellick, the World Bank president in a speech last week. Not the kind of thing you want to hear if you're already struggling to pay the grocery bill. And the extent of the rise is shocking. Since 2005, "the prices of staples have jumped 80%", he added.
India, Egypt and Vietnam have raised tax on rice exports in order to discourage its sale abroad, while a similar tax in Argentina on soybeans led to a three-week long farmer protest which just ended.
We are, as World Food Programme Executive Director Josette Sheeran said recently, facing a perfect storm'. Rising demand from emerging economies, high fuel prices and increased risk of droughts and floods. Then of course there's the biggest bogey man of them all- biofuels.
Ethanol fuels US corn shortage
The rivalry between bio-fuels and food production for agricultural land means that less acreage is being devoted to corn for food purposes. Instead, it's being used for ethanol. So while demand for corn for food is rising, acreage is shrinking. US farmers expect to grow 86 million acres of corn for food this year, down from 93.6 million in 2007, as more and more farmers switch to the heavily government subsidised corn for ethanol industry.
"It's a crazy strategy", says Espen Baardsen, an analyst with Eclectica Asset Management. Any small shift in the weather this year, and the U.S. will run out of corn. "Any small hiccup and there's simply none left", he says.
The only question left is: what price will people stop eating at? Which leads us to the question "Are there any winners?" from U.S' current debacle?
Well yes, there are.
McDonalds can claim to have done better than most. Indeed, last month the fast food chain announced that same-store sales, a comparison of the sales of stores open for a year or more, rose 11.7% in February. That was well ahead of the 5.7% increase reported last year. And the reason? The restaurant's dollar menu.
Americans might start shunning beer. But there's no way they'll turn their back on cheese burgers and fries.
But trading in the low $50s from a high of $63 in 2007, don't expect McDonalds' shares to perform spectacularly well any time soon. The restaurant's sales may be rising, but trying to keep the price of a cheeseburger at $1 a pop when beef and flour prices are on the up is no easy task.
It's definitely getting tough in the U.S.
Turning to the wider markets
Friday London market close: FTSE 100 - 5,947.10 (+55.8)
European markets: Paris CAC-40 - 4,900.88 (+13.01); German DAX-30 - 6,763.39 (+21.67).
US markets: Dow Jones Industrial Average - 12,609.42 (-16.61); S&P 500 - 1,370.40 (+1.09); Nasdaq - 2,370.98 (+7.68).
Asia markets: Japanese Nikkei - 13,293.22 (-96.68); Hong Kong's Hang Seng remained closed for a public holiday.
Crude oil: $106.360. Brent spot: $104.870.
Gold $916.400. Silver: $17.800.
Currencies: pound/dollar: 1.9858; pound/euro: 1.2655; dollar/euro: 0.6373; dollar/yen: 102.6850.
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