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Chamber economist: Be prepared to be called Big Dairy

Dubay
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ORLANDO, Fla. – With dairy prices up higher than other food prices, dairy companies should be prepared for criticism, Chamber of Commerce Chief Economist Curtis Dubay said here Tuesday at the International Dairy Food Association’s Dairy Forum.

Dubay
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“General food prices were up 13% last year, but food inflation is now down to 12%,” Dubay said. “But dairy prices are up 16%. Be prepared to be referred to as Big Dairy.”

The dollar has probably peaked in value, which would be good for dairy exports, he said.



Dubay said there will be a recession in the coming months as the Federal Reserve keeps interest rates higher to tame inflation, but the country will muddle along in 2024, when there could be “a soft landing.” But the Fed won’t lower interest rates until the inflation rate is about 2%, he said.

“It will be 2025 before things turn around,” Dubay said.



“You’ve got us all pumped for 2025,” IDFA President and CEO Michael Dykes told Dubay as they began a question-and-answer period. But Dykes added that his members need to get through 2023 and 2024.

Dubay said that high food and gas prices put Americans in a bad mood, but people — at least until now — have been continuing to spend at a level above inflation. That’s because of a buildup of $3 trillion in excess savings during the pandemic. But now they are going through those savings and are starting to increase their debt on credit cards, “though not at a concerning level,” he added.

Most businesses are unlikely to fire workers because they are still short-staffed and worried about recruiting others. The exception, he said, is the tech industries, which are “rightsizing” their workforces to their needs.

Dubay said that despite explanations that people have retired or are staying home to raise children, he still isn’t sure “where the workers have gone” or what will bring them back to work.

Economic predictions have their limits, Dubay said.

“Psychology is not the strong suit of economists,” he explained. “We are not people people.”

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