On the Edge of Common Sense

by Baxter Black

On the Edge of Common Sense

High Price of Food?

How should we as food producers interpret the media’s looming concern about headlines saying “Rising Food Prices Bite Budgets!” Examples given from previous 12 months’ list of percentages increases show: Ground Beef 4.9%, Eggs 5.7%, Tomatoes 6.9%, Pork Sausage 8.7%, Potatoes 9.2%, Fresh Fish 9.9% and Oranges 12.2%.

The cause of the increases are different; from drought, freezing weather, disease, government regulations, EPA, loss of farm ground to suburbia, etc. It all boils down to a reduction of product vs. its demand. We producers justify the prices of the basic commodity, food, because it has lagged unfairly behind almost all other life essentials such as oil, wood, coal, ore, and fresh water. We repeat the statistic that people in our nation spend less than 10% of their income on food, 40% of it eating out. That is lower than either housing, transportation or health care which together account for 52%. And the Department of Labor who did the survey didn’t even include income tax!

Another factor is that with most foodstuffs, the farmer’s cut is less than the grocer or restaurant middlemen, from 5% for grain products (bread) to 50% for milk. And that’s eating at home. Anyone who eats out 40% of the time and complains about the cost of french fries, orange juice, hamburger, Ben & Jerry’s or Starbucks is hard to take seriously. In addition, today’s modern middle income shoppers are accustomed to “Seasonal” fresh produce always being available. If it’s not available in the produce section they can find it canned, bottled or frozen on the shelves. Still others are willing to pay more if they think it is organic. We are very spoiled shoppers.

However, single parent families working two jobs or those who are receiving welfare and/or unemployment checks are much more aware of the increase in the price of food. To our credit the Farm Bill aids 46.7 million Americans (1 in 5) that are receiving food stamps to the tune of $72 billion a year, to ensure that none go hungry. This life saving program, as well as all of the entitlement programs, are paid for by the taxes collected from the 90% who are working. It is not the government that makes money, the government takes money from those who earn it and redistributes it.

The jobless and the middle income groups are less affected by the food prices. But caught in the vice are those single-parent, geographically challenged, low-middle income Americans holding down a job and paying their own way. These workin’ moms do shop thriftily and if the price of salmon or strawberries or asparagus or chuck roast is too high, they can do without. The supermarket is full of nutritious, generic brand, fresh meat and vegetables that are affordable, especially if you know how to cook. However, these workin’ moms are tempted by the ease and low cost of “fast food” meals vs the ever-present exhaustion that accompanies the effort of fixing a home-cooked meal for the kids at the end of a work day. Nothing is easy.

So what about the “Rising Food Prices Bites Budgets?” Most producers do their best to grow their crop as cheaply and efficiently as they can. They like to make a profit, sometimes they get lucky and sometimes they go broke, but the consumer never runs out of something to eat.