This Year’s Harvest, Inflation

David Reavill
4 min readOct 14, 2022
American Gothic, by Grant Wood

Farmers are unique. They work hard all year round. But only get paid at harvest. Many financing programs help the farmer offset the expenses of planting, fertilizer, and upkeep. But the reality is that farmers never know their yearly income until they bring in the crops.

Here in rural Pennsylvania, that’s happening right now. They’re cutting corn, picking apples, and processing all the other myriad crops and livestock.

However, this is a challenging year. It began last spring when the price of seed rose dramatically. The cost of nearly all of the farmer’s inputs is higher than in previous years. For the second year, fertilizer rose to an all-time high, almost a third over 2021. Most of the farmer’s equipment runs on diesel; as we all know, diesel is now more expensive than gasoline. Both gasoline and diesel increased dramatically in price.

Those are all expenses that the farmer has borne so far this year. The local gas station won’t accept payment when the wheat crop comes in. They want to receive compensation for the sale. And so the farmer digs into their wallet to pay the gas station, seed store, and fertilizer man, all at the time of purchase — expense after higher expense. That is until today, harvest time. Today, the farmer, at last, gets paid.

Today, the farmer finds out whether they are profitable or, heaven forbid, in the red. Only at harvest, when they sell their crops, does the farmer know if they’ve made a profit. Imagine working all year long, only to find out at harvest time if it’s all been worth it.

In America, harvest time has always been a happy time. We live in an abundant country where harvest has been plentiful and cost predictable. Generally, the farmer can tell you, at planting, almost precisely what they’ll earn at the season’s end. And when that harvest comes, and the farmer, at last, gets paid, there is usually great joy in farm country.

But not this year. This year the farmer has added up all those expenses, the high cost of fertilizer back in June, the price of diesel to tractor the field, and the cost of electricity. They’ve accumulated those expenses and the unexpected impact of natural disasters. In the southwest, the continued drought, for Chicken farmers, the disease which culled their flocks, and for many, the fire that destroyed their local processing plant.

So this year, farmers are delivering the highest-priced food items in our lifetimes. It’s a shock that the farmers have been living with all season, knowing that this time was coming.

Now it’s here, and we’re going to be stunned when we go to the grocery store. In the latest report on Producer Prices this last Wednesday, the government reported that almost all varieties of food are higher priced. Three crops, in particular, saw mind-numbing increases. Vegetables, grains, such as wheat and corn, and eggs are all up more than 10%, not for the year but just the month.

That’s right, these three foods, veggies, grains, and eggs, were up more than 10% in September alone.

Regrettably, these prices will undoubtedly rise as the harvest goes on. Because right now, there is more than enough to supply all the supermarkets and grocery stores. But there is every indication that this year’s harvest will fall short of previous years. And when those shortages hit the shelves, look out, that’s when prices will skyrocket.

It’s been a rough year for the farmer. It began with a financial squeeze. They had to pay for their higher costs all year long. Then today, knowing that their expenses will impact higher food prices. And those prices are passed to an unsuspecting public.

There’s not much joy in a harvest time when the only bountiful crop is, Inflation.


Today is the beginning of earnings season, with the nation’s largest Bank, JP Morgan Chase reporting their results. The numbers for JPM came in pretty much as expected: the Bank lost over $950 million on their trading desk as this bear market in stocks and bonds has been just as vicious for the big guys.

We’ve entered a new cycle where the banks must beef up their loan loss provisions. You may remember that it was just a couple of years ago that this economy was humming along, and the banks could reduce their provision for losses. But that’s not the case anymore, as more and more of the middle class finds it impossible to make all their monthly payments. As a result, banks will need to write off the bad loans. JP Morgan estimates loan losses will exceed $1.5 billion in the coming months.

The Census Bureau will announce the September Retail Sales number in just a few minutes. Sales are a significant measure of the current condition of the average consumer. The Street expects retail sales will be down slightly from August but still positive.

An even more direct measure of consumer outlook will be the Michigan survey of Consumer Sentiment, coming up shortly.

Earnings so far reported positive results from all three money-centered banks: JP Morgan Chase, Wells Fargo, and Citigroup, with United Healthcare also trading higher. Two stocks trading lower on results are investment bank Morgan Stanley and US Bancorp.

For more stories on money and finance, follow me here on Medium.



David Reavill

David Reavill writer + finance +iconoclast + hiker + Pennsylvania #valueside daily podcast + medium + meditate