'Climate Change' Heats Up Luxury Goods

The Wall Street Journal recently imported a new editor-in-chief from the U.K. Emma Tucker is her name, formerly of Britain's The Sunday Times, and according to a recent National Review piece her mandate is "modernizing the highly profitable but sometimes stodgy paper, in part by diversifying its readership beyond its core audience of wealthy, white businessmen." Veterans of the paper told NR they have concerns about the shift, noting that Tucker "appears to lack a basic understanding of American government, politics, and culture," that she is bent on nudging the paper's political leanings leftwards, and "seems to be prioritizing less serious lifestyle stories with snappy headlines over hard-hitting accountability journalism. "

There is perhaps no more perfect illustration of these concerns than some of the paper's recent focus on the everlasting “climate change” story, especially as it pertains to sharp price rises among the prices of small luxury foods. According to a June 10th story, entitled “Climate Change Is Coming for the Finer Things in Life: Wine. Olive oil. Coffee. Cocoa. ‘It does feel a little apocalyptic'." The piece opens with an anecdote about an assistant in a London art gallery who can no longer afford to add olive oil to his salad dressings. “You remember the days when you could have olive oil,” he says, pitifully.

Mamma mia, that's expensive.

To be sure, prices for these commodities have gone up. As someone who consumes a lot of coffee, a moderate amount of olive oil, a little less cocoa, and not so much wine, I blamed those rising prices on inflation, which has been aggravated by the Biden administration's policies. After all, all of my groceries, luxury or basic, have gone up a lot in the past three years. That is true for everyone across the country.

But the Journal assures us that rising temperatures are really to blame. Italy's olive groves are baking, which is killing oil production. And then there's drought. But also maybe too much rain, which is compromising Italian grapes and thus wine production. Essentially weather – and Italian weather in particular – is the reason that these goods are increasingly out of reach of many consumers. But definitely not inflation. Please, please, don't blame inflation!

The truth of the matter is that the reason for rising commodity prices are more complex than the WSJ lets on. Weather is definitely part of the equation. It always is, as any farmer will tell you. And it is likely that “Heat waves and untimely rain in West Africa have sent cocoa prices to record levels this year, causing chocolate makers to raise prices,” as the Journal reports. But there's more to the story. Apparently with the coffee crop, which is down in Vietnam, the world’s second largest producer of coffee, human behavior has contributed to rising prices. Traders are hoarding coffee beans, pushing prices higher for the Robusta variety, which is now at a 45 year price high.

According to Bloomberg, Vietnamese farmers responded to their third year of drought by using less fertilizer, and switching over to growing durians instead of coffee. That affects output.

Robusta's gonna cost you.

And then there's demand. Prices are rising because “China is now developing a strong taste for coffee.” And robusta, being normally cheaper than other varieties, has been an especially hot commodity. The coffee industry anticipated that higher prices in general would drive demand for cheaper coffee among consumers. Apparently Brazil, which makes up half of international production of coffee, has a big crop of Robusta ready for market, even as it is shifting over to producing different types of beans. So there will be enough coffee to power life around the world, but prices will rise until new production kicks in.

As for wine, the Italian wine industry is certainly struggling this year due to weather. But Italy is only one among many nations that produce wine. France, Germany, Spain, Chile, the U.S., South Africa, and others produce plenty of wine. The U.S. is facing rising prices for non-climate reasons. According to the BBC, American vineyards, especially smaller ones, are raising prices is that they are still feeling “the squeeze of supply-chain issues in the wake of the Covid-19 pandemic.” In particular, glass bottles for the wine are harder to come by than in the past.

American winemakers rely on glass manufacturers in Europe for wine bottles. And because natural gas is a key component of the production of glass, the war in Ukraine has made it significantly more expensive to manufacture those bottles when, since Europeans can't just buy cheap Russian natural gas. The price of glass has consequently jumped by twenty percent in the past year. And that's not the only packaging material which is more expensive. The BBC cites an industry source who explains, "It's also the labels, the printing costs, corks, capsules – everything has gone up fairly dramatically in price."

Beyond that there are elevated labor costs, which means that getting the grapes off the vine costs more these days, and perhaps even some good old fashioned greed – consumers got used to paying higher prices for wine during Covid, and now the industry is disinclined to cut into their profits by lowering them.

All of which is to say, the economy, and thus the pricing of our culinary comforts, is more complicated than the very convenient “climate change” boogeyman. That is something you'd expect a "boring" businessman's newspaper like the Wall Street Journal to appreciate. Perhaps providing easy, left-coded explanations to difficult questions will diversify the papers readership (though it is worth noting that doing so hasn't helped WSJ competitors like the Washington Post), but we will all be poorer, and less informed, for it.