Are our food prices being artificially inflated?

Question

Subsidies kill and artificially inflate whatever markets they are applied to.  I am aware of corn, wheat, rice and soy [ which is unnecessary ].  What I am not aware of is how exactly are the prices artificially inflated.  Are there boards that agree, and collude to price fix?  I know that the image of some farmer waking up at 4a.m. is false now, since the majority of food is produced by huge corporations.  But, are these corporations twisting the government's arm and being allowed to inflate food prices, regardless of actual cost?  With distribution and mechanization of big corporate farms, food prices should be falling precipitously, especially now.  

I also know that the current oil prices have absolutely nothing to do with current transportation, because all commodities, INCLUDING the crops, were purchased 6 months to a year ago and oil price used for that transportation are from at least a year to two behind.  

Does someone have a detailed answer to how and why these food prices are artificially inflated?

Ohiorganic · Accepted Answer

perhaps grains, dairy and meat areas they are commodity crops and the commodity game is pretty much a ponzi scheme. But the fruits and vegetables are not commodity crops nor subsidized and prices for these are still dictated by the free market (along with weather).

Oh and corporations do not farm, us farmer do the actual work of tilling the soil, planting and harvesting food but I do see this statement often used and always used by non farmers (though corporate interests often own the seed/livestock and retain ownership even after the farmer "buys" the inputs from the corporation)

? · Answer

I don’t have a definite answer to your question; just some perspective.


(1)

Prices of most products are determined in a very simple manner:
“Which is the highest amount that people are willing to pay for this product?”
When that question is answered that is the price assigned to that product.

I don’t see why pricing for food or oil should be determined in any other 
manner if these commodities are not regulated.

The “distribution and mechanization of big corporate farms” should not 
cause food pricing to drop.  Why would it?  Greedy producers want to sell 
for as much as they can get.  Why lower their prices?

(2)

During Bill Clinton gas at the pump averaged $1.15/gallon.
Crude oil averaged around $22/barrel.
If I remember well it hit $28/barrel at its peak.

When Bush took over gas shot through the roof [up to $150/barrel].

But if oil is not regulated then why didn’t the price shoot up during Clinton?
Because up to the end of Clinton’s presidency interstate commerce of 
electricity was regulated (as it was for many administrations prior).

Bush deregulated it (by executive order to FERC) and now, since electricity 
pricing was free to go up in price, there was no competitor holding down oil 
prices from taking a leap into the sky either.

The free market determined pricing.
I would think it does so in agriculture too.

(3)

Your “colluding boards” theory sounds plausible especially with more farming 
being controlled by less players.  It would be easier for them to control pricing.

Gaijin · Answer

Your wrong about diesel prices.Yes they do contract for produce ahead of time but they still have to have it trucked in and most of it is hauled by independents who pass along the price of fuel and all surcharges.

Companies like Safeway who have their own truck fleets do the same.Plus the farmers are hit with higher diesel prices and that is reflected in prices also.

LadyB · Answer

Of course they are!

I'm now paying $4.99/lb for yellow squash that was only 99 cents a couple of months ago.

Are our food prices being artificially inflated?

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