Food is Costing Too Much? Why?

There are so many global reasons why food insecurity is rising. Wars, from the Gaza conflict to the decimation of Ukraine, one of the most efficient grain-producing countries in the world, make growing, harvesting and getting to market severely difficult wherever they occur. New agricultural diseases, many spreading across new regions (from migrating species), sometimes cross-infecting other animal and plant life – like the bird flu now infecting American cattle and dairy cows. Or like the recent nationwide recall of meat and poultry products potentially contaminated with listeria that reached nearly 12 million pounds, including ready-to-eat meals sent to U.S. schools, restaurants and major retailers, according to the Department of Agriculture.

Extreme weather conditions around the world – reflected in the United States by some of most devastating hurricane and wildfire damage in a century (pictured above) – are destroying crops and livestock with a concomitant impact on the cost and availability of food. Climate change has imposed crop and livestock-killing heat and water loss in so many countries, including the United States. Populations in places like Haiti, Sudan, Somalia are starving. Southern Africa faces similar issues: “The United Nations' World Food Program (WFP) gave the warning on Tuesday [10/15], adding that over 27 million people are affected, the worst hunger crisis in the region in decades… Five nations—Lesotho, Malawi, Namibia, Zambia, and Zimbabwe—have declared national disasters while the drought has ravaged crops and left millions struggling to survive.” Newsweek, October 15th.

Even major food exporters face issues. Brazil, as the second most agriculturally productive exporting nation in the world, has been burning off rainforest land to make way for farms and mining ventures, even as rising temperatures are killing off crops in record numbers. Experts are suggesting that we may soon be forced to give up Brazilian coffee and cocoa, making those crops prohibitively expensive. Everywhere there are conflicts, land-destroying climate change and migrating disease… the consequences on global food prices can be staggering.

But there is a notion that corporations in the food supply chain are price gouging the public. Higher prices and shrinkflation. If you go by the relative percentage of gross revenues that represent profits, they’re not. But even keeping those percentages the same, as costs go up, hard dollar profits follow. But price gouging may not be the political football we think it is. FastCompany.com (reprinted from The Conversation), October 12th, presented by Peter A. Coclanis, professor of history and the director of the Global Research Institute at University of North Carolina at Chapel Hill: “The cost of food has been a big concern for Americans since the height of the COVID-19 pandemic, with U.S. food prices rising 25% between 2019 and 2023. While U.S. food inflation slowed considerably in 2024, grocery prices are still up from prepandemic numbers…

“Although many states have laws on the books against price gouging, such laws have proved difficult to enforce. In the case of the U.S. grocery industry, profit margins (traditionally razor-thin at about 1% or 2%) remain small even today… What’s more, it’s important to note that food prices in the U.S.—relatively speaking—are the cheapest in the world, and have been for a long time. This is the case whether measured in terms of disposable personal income or in terms of percentage of household expenditures.

“For example, U.S. Department of Agriculture data shows that in 2023, the most recent year for which data are available, Americans spent about 11.2% of their disposable personal income (or income after taxes) on food. That was unchanged from 2022… No one likes to pay more for food, but a little comparative data can reduce one’s sense of victimization, if not alleviate the pocketbook pain.

“Cross-national data compiled by the USDA shows that in 2022, Americans spent less on food as a proportion of total consumer expenditures than people in any other country. People in many other nations spent two, three, or four times as much in percentage terms, and sometimes even more… [There] are big differences between the U.S. and other high-income countries such as Japan, Sweden, Norway, France, and Italy, with the U.S. percentage spent on food considerably lower than in any of these other rich countries. This is because economies of scale are more important in American agriculture, among other reasons.”

There are political “solutions” posited by both major parties that probably cannot do much to make US food prices dissipate: from Harris’ focus on price gouging or Trump’s emphasis on purging immigrants and imposing tariffs on imports. Aside from Harris’ ability to use antitrust laws to stop anti-competitive mergers in the food industry, there’s not much her policy would accomplish. As for Trump’s imposition of tariffs, I have yet to hear from a credible economist that simply applying a price-raising de facto sales tax will create jobs or lower retail prices. A quarter of parts for US-made automobiles come from overseas! Even if you forget about the probable retaliatory trade wars against US exports, this is hardly a “solution” to lower the cost of living.

Further, what do you think happens when you remove the lowest cost labor – stoop farmworkers, slaughterhouse labor, etc. – by deporting millions of those “south of the border” immigrants? Aside from the statistical reality that they commit fewer crimes proportionately than American-born citizens, replacing them with expensive traditional American workers or high-tech robots… well, you can expect the cost of American-grown crops and livestock to skyrocket. We can see parallel cost increases in all the business sectors – like construction and childcare – where these immigrants work, and across the board where import tariffs rise.

I’m Peter Dekom, and as long as Americans prefer to find blame or embrace conspiracy theories in lieu of factual solutions, you can pretty well count on massive waste, political wheels spinning that actually make matters worse, while American anger and discontent just dig in and continue to serve as the toxic feeding ground for so many unscrupulous and profoundly selfish politicians.