Some holiday traditions will have to be disregarded this year as inflation puts the crunch on holiday ingredients. Will cookies survive without butter?!?


Crap…

How did I become the “doom and gloom” guy for Money Moves?

I swear, I’m not a pessimist by nature. In fact, anybody that knows me personally would most likely categorize me as an “optimistic realist,” so I really don’t understand why so many of our conversations have turned dark these days.

Yet…here we are.

I can’t tell if I’m feeling the general malaise that many Americans are feeling when it comes to the economy, or if I’m just ahead of the curve.

Either way, I apologize for the negative nature of our little talks here.

The silver lining is that you can’t say I didn’t tell you something bad was coming. I see my job, first and foremost as a way to keep you guys abreast of EVERYTHING that is going on in the markets, good, bad, or neutral.

My other job here is to give you solutions to the bad things on the horizon.

As I said, I want you to be informed, and forewarned is forearmed, after all. Even when news is bleak, I want to make sure you can prepare yourselves for the coming storm and at least feel like your money is safe.

So, since I’ve somehow become “that guy” for the moment…let’s just roll with it.

The End Of Cookie Season As We Know It?

So…Inflation.

As a military buddy of mine once said, “we’re in the s**t now.” There’s not one aspect of our financial world that this ugly aspect of a flagging economy hasn’t touched.

We’re paying more today for things than we did even in October 2021, much less December of 2020.

It’s the nature of the beast.

In fact, the average Christmas dinner will be costing even MORE than Thanksgiving dinners did just a month ago – but there’s another casualty of the ongoing inflation, and it’s downright criminal.

For many US families, the holiday season also means “Cookie Season,” as festive cookies are one of those sweet traditions that Americans have come to know and love.

My family used to make 3 traditional cookies EVERY Christmas: glazed anise knots, pizzelles, and traditional sugar cookies.

However, many families won’t be having as many cookies—or any cookies at all—this holiday season because the cost of one of the main ingredients for these yummy treats is going through the roof.

Americans are eating more butter than ever before. Per capita, US citizens consumed 6.3 pounds of this savory condiment in 2020. That’s the highest number since the Ford presidency!

But butter consumption definitely peaks in the fourth quarter of every year, and we can thank all of those holiday dishes for that. Mashed potatoes, corn casseroles, and, of course, holiday cookies all call for it by the cupful.

The High Price Of Buttery Goodness

However, the price of butter in 2021 is SOARING.

Spot wholesale prices for Grade AA butter are up about 40% from this time last year, reaching more than $2 a pound.

Oh, there’s no cow shortage, and there’s plenty of milk to make it, but packing and shipping have been a challenge amid widespread labor and materials shortages. That’s forced some companies to raise their prices in order to make up for their growing costs.

That being the case, some households may be forced to make the switch to vegetable-oil spreads like margarine to cut costs, even though the prices on THOSE products are rising too.

What’s worse, it’s not just households that are feeling the squeeze.

Small businesses are feeling it too.

Small business owner Dina Cimarusti, who just opened her Chicago-based Sugar Moon Bakery in September, knows this crunch all too well, as she just paid 40 cents per pound MORE than usual for butter in early December….

But for her, subbing real butter out for margarine just isn’t an option. You can taste the difference. She said, “It’s not just butter… even my produce prices have gone up significantly since I opened. Unless I raise my prices, I’m obviously losing money.”

This is what we’re dealing with, folks.

And like Cimarusti, our only option is to wait it out.

Of course, you can hedge your bets by investing in dairy in the meantime. There are a few publicly traded stocks out there that could offer profit opportunities for those looking to curtail their losses.

Nestle (NSRGY) is one of the largest dairy producers on the planet, and you may want to give them a look. They’re Neutral as of right now in the GZF rating system, but that could change, as they’ve got volatility in their favor.

(For Nestle’s full report, click HERE)

Regardless, this holiday season may see some households tightening their purse strings a little as prices continue to soar.

But don’t worry…some relief should be coming early next year as the Fed begins to hike interest rates. So, in the meantime, best to look for some safe, dairy-based opportunities like Nestle and others.

And maybe leave fewer cookies out for Santa this year…

 

“I like to use ‘I Can’t Believe it’s Not Butter’ on my toast in the morning, because sometimes when I eat breakfast, I like to be incredulous. How was breakfast? Unbelievable.” – Demetri Martin