Why are food prices so high and getting higher?

Ok, the stuff that jim is saying is horseraddish (sorry, jim).

the reason why food prices you see in the supermarkets were rising is because of two things, one is a healthy growth of demand for american agricultural products (e.g., corn, wheat, etc) around the globe, and the increase in oil prices.

what did oil prices have to do with corn? when oil was trading at $140 per barrel, the corn lobby was able to get congress to pass a number of tax incentives and other legislation that supported the use of corn to produce ethanol. so more corn was used for ethanol, and less corn was used for agriculture. similarly, a lot of farmers saw that the good money was in growing corn for ethanol, so they planted less wheat and less of other things and more of corn. btw, what's why beer prices shot up, too. farmers were planting much less of hops, which is necessary for beer, and so hops prices skyrocketed. and so did beef, pork and chicken because they are fed corn.

of course, as oil prices fell, so did the prices of things like corn and wheat. check out the links below for corn and wheat. if you compared these with the price of oil, you will see a very strong relationship. ever notice that in the last year, not much discount in cereals?

it will take a couple of quarters for these price reductions to make it to your supermarket. but as it does, you'll see it less in terms of permanent price reductions and more in terms of sales of things like cereal!

That is one of the big problems when you have few suppliers, few wholesalers and few retailers.

We have corporate farming, where less then 1/2 percent of the people are farmers. Huge mechanized monopolies run by a few huge companies.

They have passed on the price of fuel to you, then will reduce your price slowly as the public demands it, thus increasing their profits.

Thus, because food prices are so high our government must subsidize the people who can not afford those prices through our food stamp program. That was at about 13% prerecession levels, I suspect it is about 17%-20% now

Where I live, as a transplanted American in China, 47% of the people are farmers. There is a lot of competition because of that. The farms can be more competitive and give far lower prices because most of them do not depend on costly machinery, expensive fertilizers or transportation. The cities also do not have the urban sprawl we have, having mostly multi story housing. Thus, cities like the two I have lived in are surrounded by farmland and the local farmers bring their products to market at dirt cheap prices. How about a head of cabbage for 8 cents? Or a pound of apples for the same price? Get my point?

Keep in mind, our population has 300 million, China has 1.3 billion, about 4 times more then ours, and they are roughly the same size as us with less arable land. If they can provide their population with an abundance of food, virtually no one on public food stamps, and competitive farming, why can't we?

The answer is simple, huge corporate farms and a government that is lobbied by that, thus our food costs are extremely high and will remain high till we get off this insane greed of corporate conglomerates that do not have the peoples needs at heart, but only their shareholders and bottom line of huge profits.

Peace

Jim

.

Gas prices were only part of the equation.

Flour, rice, and corn were trading at ridiculous prices recently and most foodstuffs are carb dependent. The manufacturers were used to paying pennies on the dollar...and suddenly found the cost of flour and others grains increasing exponentially.

You also need to consider how much of our food is now being imported from around the world...and the cost picture starts to look grim. Even local growers got whacked by gas prices during their prime growng season, so the savings you could usually count were also off.

I have always been mystified at how they calculate inflation, and GNP, since in recent years, neither took consumer goods into consideration.