Currently browsing posts about: Price-of-food

Every now and then a headline makes me gasp:

Deena Shankar’s article in Bloomberg News begins:

It’s been just about a year since the US government slashed additional pandemic-related food-stamp benefits, and some of the companies that make and sell food are seeing that hit their sales.

As she explains,

Enhanced benefits for the Supplemental Nutrition Assistance Program, or SNAP, ended last February, meaning families and individuals saw monthly cuts of $95 to $250 or more in what they received. Families with kids lost at the high end of the spectrum, according to the Center on Budget and Policy Priorities, a nonpartisan research and policy institute.

Never mind the effects of reduced benefits on low-income families.

packaged-food giant Kraft Heinz Co. cited the reduction in benefits as a major headwind that the company and the industry faced in 2023. “We saw some challenges in our mac-and-cheese business,” Chief Executive Officer Carlos Abrams-Rivera said on an earnings call. “Frankly, it’s a business that is driven disproportionately by our SNAP exposure.”

How’s that for a gasp-inducing statement.  SNAP recipients are the core customers for this product.

If you want to know about inequities in the US food system, start here.

Kraft Mac & Cheese exemplifies cheap ultra-processed food.

Walmart sells five boxes for $4.88, less than a dollar a box.

For that, you are supposed to get three servings per box, but the whole box adds up to:

• 750 calories
• 1680 mg sodium,(4.2 grams of salt)
• 27 grams sugars

And what’s in this?

ENRICHED MACARONI (WHEAT FLOUR, DURUM FLOUR, NIACIN, FERROUS SULFATE [IRON], THIAMIN MONONITRATE [VITAMIN B1], RIBOFLAVIN [VITAMIN B2], FOLIC ACID), CHEESE SAUCE MIX (WHEY, MILKFAT, SALT, MILK PROTEIN CONCENTRATE, SODIUM TRIPHOSPHATE, CONTAINS LESS THAN 2% OF TAPIOCA FLOUR, CITRIC ACID, LACTIC ACID, SODIUM PHOSPHATE, CALCIUM PHOSPHATE, WITH PAPRIKA, TURMERIC, AND ANNATTO ADDED FOR COLOR, ENZYMES, CHEESE CULTURE).

Walmart sells a pound of carrots for $1.38.

There is something seriously wrong with a food system that makes a 750-calorie Mac and Cheese product so much cheaper than a pound of carrots.

A reader from Phoenix, AZ, Maria Zafonte, sends this from a local Safeway:

From her standpoint—and mine—this is a great way to encourage overeating.

As she explained, if she bought just one bag of chips, each would cost $5.99.

But if she bought four, the unit cost was only $1.97 each.

As she put it:

The problem is what am I going to do with four bags of Doritos?? The healthier choice is financially penalized. It is very frustrating!

Indeed, it is.

One of the hallmarks of ultra-processed food products is their enormous profitability.  You can bet that Safeway is not losing money on 4 bags at $1.97 each.

Even if this is a loss leader (a gimmick to get you into the store), it’s an incentive to overeat.

Caveat emptor.

While producers of sugar cane celebrated National Real Sugar Day on October 14, the New York City Council voted to require chain restaurants to post warning labels on sodas and other menu items that exceed to-be-defined limits on added sugars.

Mayor Eric Adams signed the Sweet Truth Act, which gives the city until 2024 to set standards and design the icon, and gives chain restaurants until 2025 to comply.

Meals at fast food and fast casual restaurants can be exceedingly high in added sugars, amounts that far exceed the FDA’s daily recommendation for consumption of 50 grams per day. Even most “small” fountain sodas sold at leading fast food chains contain more than a day’s worth of added sugars. Added sugars have been linked to weight gain in children and adults. Sugary drinks may also contribute to type 2 diabetes and heart disease.

In a video, New York City Health Commissioner, Dr. Ashwin Vasan, explains why sugar redction is a good idea.

Where is the FDA in all this?  It held a public meeting on the need for sugar reduction.  What it will do as a result remains to be seen, but the New York City action is surely a nudge.

In the meantime, the Government Accountability Office has some things to say about the U.S. Sugar Program.  It sums up the issues concisely.

The Department of Agriculture administers the U.S. sugar program to support domestic sugar production through tools such as limiting the supply of sugar.

The program creates higher sugar prices, which cost consumers more than producers benefit, at an annual cost to the economy of around $1 billion per year.

The program also restricts the amount of sugar entering the U.S. at a low tariff. The tariff restrictions are applied using a method based on 40-year-old data that doesn’t reflect current market conditions. This has led to fewer sugar imports than expected.

We recommended that USDA evaluate its method for restricting imports.

Comment: Here is a situation in which policies for sugar production and import intersect with policies for sugar and health in peculiar ways.  The objective of import policies is to restrict them in order to keep prices higher as a means to protect domestic sugar producers.

Ordinarily, food policies are designed to keep prices low—but not in this case (chalk this up to effective lobbying by cane and beet sugar producers, and the power of lobbyists in sugar-producing states).

Also ordinarily, higher prices would reduce demand, but sugar prices are nowhere near high enough to influence demand, which is one reason why this system continues.

Current policies are estimated to cost the public as much as $3.5 billion a year; divided by 350 million Americans means that the policies cost you an extra $10 per year for the sugar you buy—nowhere near enough to affect consumption.

Disparate goals for sugar are yet another reason why a single food agency overseeing the entire food system would be useful for reconciling these kinds of problems.

The answer: it depends on how much money you have.

USDA’s Economic Research Service has just issued a chart on how much countries throughot the world spend on food on average as a percent of their total expenditures.

As a general rule:

As incomes rise with economic development and urbanization, the share of income spent on food tends to fall while discretionary spending on household goods, education, medical services, and recreation tends to increase.

Rich countries like ours spend less than 10% of our incomes on food—on average.

But Americans with lower incomes spend more than 30% on food.Th

This is why food assistance needs to include income assistance as a matter of policy, especially because people are having to spend more and more on food, even after adjusting for inflation.

Thanks to Lisa Young for this:

The average price of a dozen eggs goes up and up.   It now averages $4.25 a dozen, and that’s for the cheapest kinds.

The New York Times explains

• Inflation
• The war in Ukraine
• Higher feed costs
• Higher energy costs (those hens have to be kept warm)
• Avian flu (44 million hens died or were killed)
• Higher-than-normal demand

It could get worse.  Avian flu infects animals as well as birds and could infect us.

How’s that for a cheery thought.

Small egg farms, anyone?

Or chickens as art, per National Geographic?

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The USDA has just published its latest food dollar series.  (And see below for international data.)

And here’s how all that is distributed.

If you are a farmer, you get an average of just over 7 cents on the dollar.

The real money is in processing, retail, and food service—added value, indeed.

The Food and Agriculture Organization is now providing this information for other countries at its new Food Value Chain domain.  This is an interactive site that is not particularly intuitive to use; it will take some fiddling to lmake it work.

The new FAOSTAT domain, which will steadily expand coverage, has information for 65 countries from 2005 through 2015. It shows that around 20 percent of expenditure on food at home accrues to the farmer, around one-fourth to processing, and nearly half to retail and wholesale trade.

Meanwhile, only around 6.7 percent of consumer expenditure on food away from home accrues to the farmer. That figure is steadily decreasing even, highlighting the need to pay attention to the post farm-gate dimension of the food value chains.

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Food prices are rising.  The American Farm Bureau keeps score.

Every year, the American Farm Bureau, with the help of volunteer shoppers around the country, calculates the average cost for a July 4^th cookout. This year, it will cost about $70 to feed ten people. That’s a 17% increase compared to a year ago. Inflation, ongoing supply chain disruptions, and the war in Ukraine are all contributing to the substantial increase in food prices.

And stay safe!  (Food Safety News has the details on how to avoid food poisonings).

The International Panel of Experts on Sustainable Food Systems has issued a  special report:

The report identifies four structural weaknesses that make foods systems vulnerable to price shocks

• Dependency on food imports
• Dependencies in production systems
• Opaque, dysfunctional, and speculation-prone grain markets
• Vicious cycles of conflict, climate change, poverty, and food insecurity

Doing something about these problems is a tall order.

The IPES-Food panel calls for urgent action to:

• support food importing countries (including through debt relief),
• curb excessive commodity speculation and enhance market transparency,
• reduce reliance on fertilizers and fossil energy in food production,
• build up regional grain reserves & food security response systems,
• and accelerate steps to diversify food production and restructure trade flows.

Here are:

• The special report
• The press release