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Get Ready for Significant Price Increases in The Mattress Industry 16 Feb 2021 10:43 #1

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Here’s an interesting article from an industry mag. If you plan on buying a mattress in the near future, get ready for price increases.

“The cost of foam is up 50% since the summer, and foam producers cite price increases for chemicals needed to make the foam.

Container costs have skyrocketed from $3,400 to upward of $10,000, adding to the cost of imported mattresses.

The cost of cotton has climbed from 51 cents per pound in March to 82 cents per pound now.

While no one enjoys price increases, the reality is that more are on the horizon, “

www.furnituretoday.com/bedding-manufacturers/mattress-players-say-supply-side-upside-down/

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Get Ready for Significant Price Increases in The Mattress Industry 22 Mar 2021 18:21 #2

Why is that exactly? Imports from China were "threatened" to go up 15% from China under Trump. You're saying it's 300%

There were many that predicted mattress industry in 2018 would grow from 17 billion in 2018 to 44 billion in 2024. Maybe that prediction is trying to come true through simply inflating prices. I've checked places I've always bought foam before, prices are the same as 2 years ago.

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Get Ready for Significant Price Increases in The Mattress Industry 22 Mar 2021 18:27 #3

foam has gone up huge. Nevermind my comment about staying the same in previous post. Why are foams going up so much now?

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Get Ready for Significant Price Increases in The Mattress Industry 23 Mar 2021 06:30 #4

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Hi markj,

Yes, foam and all mattress components have gone up tremendously in the past year. This was caused by the measures implemented during CV-19 lockdowns that closed most manufacturers and plants and caused broken supply chains across all industries. When businesses were allowed to reopen, most of our suppliers were out of stock because they had been closed for months. You can add to this mass money printing by most governments and then you have the perfect storm where too much money is chasing too few goods.

According to Michael Burry, the hedge fund manager (the big short), who made a fortune shorting the housing / stock market back in 2008, he is predicting that the world will go into hyperinflation and that we will pay even more for everything. We can already see this trend happening in building materials especially wood, commodities and food at the supermarket. My advice, if you need a mattress in the next year it's a good idea to maybe get it as soon as possible. In our industry we have seen five price increases in the last 6 months alone and our suppliers are hinting that more will come.

All the best,

Mario

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Get Ready for Significant Price Increases in The Mattress Industry 06 Apr 2021 02:14 #5

I think this will depend on your time horizon. Supply shocks will cause the cost of goods to rise in the near term but long term you would expect things to level out. The two caveats to that are 1) changes in consumer habits and 2) permanent loss due to folding businesses but as I understand it, neither will have a negative affect on the latex industry. As for hyperinflation, it hasn't been seen int he developed world for decades, so I would eagerly bet against michael burry.

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Get Ready for Significant Price Increases in The Mattress Industry 06 Apr 2021 04:50 #6

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The price of goods has surged .
This includes:
Steel +145%
Lumber +126%
Oil +80%
Soybeans +71%
Corn _69%
Copper +50%
Silver +38%
Cotton +35%
Coffee +34%
Wheat +25%
FAO Food Index +25%
Cattle +21%
Bitcoin +470%
Stock Market +23%
Home Values + 8%
Hourly Wages +5%
Money Supply Up +24%

Reported Inflation +1%

This sure looks like the beginning of hyperinflation to me, but time will tell...

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Get Ready for Significant Price Increases in The Mattress Industry 06 Apr 2021 19:21 #7

most of the things you listed are the result of temporary loss of capacity related to covid. Over the long term, as that capacity comes back online, prices will normalize. Some just completely screwed up their demand forecasting like the lumber industry. They expected the commercial market to crater and at the same time did not account for DIY demand at all, resulting in a lack of supply. Housing and steel are exceptions but they are also driven by structural factors outside of covid.

Core CPI, which strips out volatile food and energy, is 1.3% for the last 12mths. When it goes north of 3-3.5% for a sustained period, then there might be something to discuss. Also, when Larry Summers gets upset that probably means you are doing something right.

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Get Ready for Significant Price Increases in The Mattress Industry 07 Apr 2021 06:48 #8

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Two years ago a carton of eggs was $2.27. Today, same store, $3.89. 58% increase, my steaks have doubled in the last year, I doubt this is temporary. In our case, polyurethane foam is up 50% in the last 9 months alone and in our 20 years experience in the foam industry, we have never seen a price drop in foam. Unlimited money printing by governments will have an effect on inflation. In March 2019, The Wall Street Journal stated that the "main cause of hyperinflation is the central bank printing money to fund gaping public spending deficits".

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Get Ready for Significant Price Increases in The Mattress Industry 07 Apr 2021 13:36 #9

When I reference normalization I am thinking latter half of 2022 into 2023. Of course the supply chain might try to keep prices high to pad their bottom line. Currently see this with meat/ poultry in my area where wholesale prices have reversed course but that is not completely shown up in retail prices yet.

I wouldn't worry about the WSJ. They have been whining about that since the 80s and yet no inflation anywhere to be seen. Economist worldwide admit classic models fail to explain the relationship between spending and inflation. The US may be poised to raise taxes anyways, which will counter the stimulus to some degree.

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Get Ready for Significant Price Increases in The Mattress Industry 08 Apr 2021 06:18 #10

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35% of all US dollars in existence have been printed in 10 months. How this experiment will end, nobody knows. The price of foam has gone up 50% in the last year we have never seen a decrease in price. Get ready to pay more for your mattresses.
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