Saturday, August 14, 2010
Something is Wrong
(click on images to enlarge)
The August 2, 2010 post covered the recession and "all milk" price. I am posting the graph again for comparison.
U.S. Department of Commerce's Bureau of Economic Analysis (BEA) publishes monthly, Personal Consumption Expenditures (PCE. The PCE tables indicate how much the public spent for a number of items. There are two lines for dairy which I have added together.
As can be seen, consumer spending for dairy hardly dropped during the "official" recession (calculated by NBER). The drop from begining to end was just about 2% and the fall in the Consumer Price Index (CPI) was about 5%. All of which means, the public actually increased purchases of dairy products during the recession.
So, there is something very wrong with conventional story about the fall in farm milk price.