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Up Front: Our Daily Bread

Published Apr. 8, 2011 | Discuss this article on Facebook
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Ohio Farm Bureau's Jack Fisher ponders food prices in his May/June Our Ohio editorial.

The following will be featured in Ohio Farm Bureau Federation Executive Vice President Jack Fisher's "Up Front" editorial column of the May/June issue of Our Ohio magazine

 

I’m proud to be what I call a “commando” shopper: Get in, get out, nobody gets hurt. But my quick-strike capacities rapidly decay into near paralytic helplessness when confronted by one monumental task: Buying bread.

There’s white, wheat, whole grain, multigrain, barley, potato, rye, sourdough, raisin, cinnamon, cinnamon-raisin, French, Italian, pita and focaccia. The loaves are an unending array of sizes and shapes, made from grains produced conventionally and organically, prepared by high-tech bakeries and local artisans. It’s a lot to contemplate for a guy who just wants something to put peanut butter on.

Meanwhile, as indecision impairs my $2 purchase, a few million Egyptian citizens are overthrowing their government partly because they live on $2 a day and can no longer afford bread.

In the past year, Egypt’s cost to import wheat has gone up 66 percent. It’s a similar story elsewhere. According to the United Nations, global prices for all foods are 34 percent higher and climbing. By year’s end, 1 billion people won’t be able to feed themselves. As I watch the upheaval in Egypt and other undernourished nations it is clear that hungry people are desperate people. And that they, not I, have a bread problem.

Back here at home, food is a little pricier too. A little. Less than 1 percent higher last year; and probably 3 to 4 percent higher this year. Hardly cause for riots and revolution, but sufficient to trigger a little grumbling and some finger-pointing.

The culprits range from Mother Nature to Ben Bernanke. Crop-cutting floods, droughts and freezes share the blame with inflation-raising monetary policy. Other favored perpetrators include population growth, the farm bill, our preference for meat, market speculators, ethanol, trade policy, global warming and a mountain of other economic, social and political causes. While all of these truly do have an impact, what really moves the food market is the cost of energy. During the last spike in 2008, government economists noted that 96 percent of the increase in food prices was attributable to rising energy costs. It's no coincidence that when you notice higher prices at the supermarket, you're also paying more at the pump.

Astute readers likely noted that nowhere did I list “greedy farmers” as a driver of food prices. Besides wanting to keep my job, I excluded them because: a) they’re not greedy and b) the link between farm profits and food prices isn’t as straightforward as it might seem. A farmer’s share of your food dollar averages about 19 percent. If 4 percent inflation bumps your weekly food budget from $100 to $104, the farmer gets an extra 76 cents.

The nation’s dairy farm families are a prime example of the disconnect between what they earn and what you pay. The forecast is for you to pay about 5 percent more for milk and cheese while dairy farmers earn about 13 percent less. Hmmm.

While their influence is limited, farmers are already doing what they can to help. American farmers are in the midst of planting a projected 7 million acres more than last year. Florida’s citrus crop is forecast about 8 percent higher. Crops in Russia, Argentina and Australia are rebounding. Plus, food price history is on our side. Spikes tend to be followed by dramatic declines. A 5.5 percent jump in 2008 fell to 1.8 percent in 2009 and .8 percent last year. This spike is temporary.

Longer term, it’s you who has control over food costs, maybe more than weather, oil or farmers. What you pay in the checkout line is directly related to what you do in the voting booth. Are you voting for candidates who support stable energy supplies, agricultural research, access to foreign markets and fewer regulatory burdens? If you’re skeptical that food prices are largely political, ask an Egyptian. They’re fighting to earn the power you already have. To me, your wise use of that power would be the greatest thing since, well, sliced bread.



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