Are the days of “cheap foods” over?
By Gene Hall.
You hear it more and more in the media. The days of cheap food for American consumers—or maybe I should say inexpensive food—may be gone for good.
I’ve been following and writing about agriculture too long to make any assumptions. Americans consistently pay an average of less than 10 percent of disposable income to eat. Food in America has been among the most incredible bargains the world has ever known, and it’s a world that has historically known hunger far too often and in way too many places.
For U.S. farmers in recent decades, the problem has been the opposite. Bin-busting surpluses depressed commodity prices and thinned the numbers of farmers and ranchers to less than 2 percent of the population. Now, a perfect storm of various factors has raised commodity prices to historic levels, increasing retail food costs as well.
We’ve had crop failures around the world, including a freeze in the major vegetable production regions of Mexico. The emerging economies of the world—primarily China and India—are upgrading their diets to include more meat and vegetables. Then there’s energy, which adds costs at every step of the marketing chain. Farmers may be receiving higher prices, but they are paying record amounts to produce a crop.
Here at Texas Farm Bureau, we promote an event known as Food Check-Out Week. Making some calculations based on government data, we’ve determined that the “average American” works for only a few weeks to earn enough income to pay for his or her food for the whole year. In recent years, we’ve held the event on or about Feb. 9. This year, it slipped to the week of Feb. 21, reflecting those recent increases. By the way, that same average American will work until late April to pay taxes.
I don’t know if the days of so called “cheap food” are really over. I would need to know about future energy prices. What will the regulatory environment be? Bad weather will be a factor, but there will be good years too. The world population will continue in its desire to eat better. We can’t change that and we don’t want to.
What can we do? We need to encourage food production—lots of it. We need to understand that politicizing food production hampers it. And of course, those who grow food must make a profit.
This year may be as close as America gets to actually seeing empty food shelves. I hope so. Here’s some numbers to think about. According to the Consumer Price Index, since January of 2010, energy prices have risen 7.3 percent. Gasoline is up in the same time period by 13.4 percent.
Food during that time went up 1.8 percent.
I don’t want to dismiss the difficult time some are having in making ends meet, but food is still a bargain.
Visit the Texas Farm Bureau website at www.txfb.org .
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