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I’m excited to see stocks up for the past few days but I’m seriously concerned about inflation. Even more troubling were a few stories on Bloomberg about bad harvests.

The first story on Bloomberg:

Orange Juice Soars as Florida Crop May Be Smallest in 17 Years
By Choy Leng Yeong

Oct. 12 (Bloomberg) — Orange-juice futures soared to a 16- year high after the U.S. government said Florida’s orange crop will be the smallest in 17 years as cold temperatures and lingering hurricane damage hampered fruit growth.

And then,

Wheat Jumps for Fourth Day to 10-Year High on Supply Concern
By Jae Hur

Oct. 12 (Bloomberg) — Wheat prices rose to a 10-year high, extending a four-day rally that’s lifted prices 18 percent, on concern the U.S. Department of Agriculture’s monthly data will show a further cut in supply from Australia is likely.

and lastly,

High tomato prices bruise Mexico’s economy

But a recent Mexican government report isn’t joking about the latest menace to the economy. Damaging storms have sent tomato prices ballooning like the mutant plants in the 1978 cult classic. The rise is crimping shoppers’ pocketbooks, stoking inflation fears and upending economic forecasts.

I’m also not convinced that we’ve seen the top in oil, gold or other commodities like copper, silver and zinc. The Fed meeting minutes also confirmed that we may see more rate hikes before we see rate cuts and it’s easy to see why. A bad wheat & OJ harvest will simply drive up food prices. Perhaps we’ll even have speculators dive in and drive up other food stuffs (corn, porkbellies, etc) just like we’ve had in energy and metals.

It’s easy for the government to play inflation games with data manipulation on items but once food starts hitting people’s pocket books we may see some consumers panic. Couple higher food stuffs with possibly higher energy prices this winter and you have a very bad powder keg with a short fuse.