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High inflation milking some costs for local farms

Businesses prices reflective of high inflation
Posted at 8:58 PM, Jan 13, 2022
and last updated 2022-01-13 21:19:55-05

SANBORN, N.Y. (WKBW) – Hoover’s Dairy has been producing milk and bottling it in glass containers for more than 100 years in Sanborn. Even with the current high inflation, co-owner Rob Hoover II said it won’t impact their consist quality.

“We’re not going to cut corners and use inferior products or ingredients to make chocolate or strawberry [milk],” explained Hoover.

This week the federal government announced the Consumer Price Index (CPI) has risen to 7%

"We haven't seen inflation at this level since the early 1980's," explained Adam Strauss, CEO of Pekin Hardy Strauss Wealth Management and Forbes contributor. Strauss believes the CPI is really higher than 7% and in August he wrote an article about it called Seven Personal Finance Ideas to Combat Inflation to help consumers overcome the rising inflation.

Strauss' seven ideas, which you can read more about in the link above are:

  1. Buy Rather Than Rent
  2. Finance Your Home With A Mortgage
  3. Get An Auto Loan
  4. Improve Your Energy Efficiency
  5. Prepare For Shortages
  6. Buy Long-lasting, Durable, Products
  7. Follow A Budget

"It's always important to follow a budget, but it's especially important to follow a budget in an inflation area environment," said Strauss. "Your household budget is going to get a lot of pressure, more than the average environment."

Strauss said focus on things that are essential. For Hoover's Dairy, the essential products are the milk flavorings and glass bottles that continue the 100-year-old tradition in Niagara County.

Regular milk, 2%, strawberry, chocolate, coffee milk, and even maple milk, coming in February, gets to customers mostly by delivery. Hoover said fuel prices for his trucks have gone up, which led to delivery fees rising for the first time in more than 10 years. Hoover raised delivery fees by 50 cents.

“It's tough for everyone, so we want to remain as fair as can be, and still pay our expenses too,” explained Hoover. “Our customers are probably the best out there, we have a ton of loyal customers that have been with us for generations and we really appreciate it, because they make us who we are.”

While Hoover said he's hoping for the inflation to lower soon, Strauss said his company sees inflation "elevated for years."

"Reason we think inflation isn't going away anytime soon is because there is a problem a lot of policy makers are not discussing," said Strauss. "The debt to Gross Domestic Product (GDP) ratio of the US economy and global economy is higher than its ever been in all of human history."

Strauss believes the fix to lowering that ratio has two parts:

  1. Let inflation rise so GDP grows faster than debt
  2. Keep interest rates low so debt grows more slowly than GDP

Strauss said the big difference between CPI and GDP is that CPI measures how much prices are going up, while GDP measures how fast the economy is growing, including prices and productivity.

"We think interest rates are going to remain low for a number of different years too," said Strauss.