26/10/2024
What Does The Presidency Have To Do With The Price of Food?
Pennsylvania is in a frenzy of election mania right now. And so many people I talk to mention the price of food as their motivator for whom they might vote for. (The price of gas, too, but I’m not going to talk about that in this post.) I am going to talk about food and how the prices are determined. The first thing to know is that it’s not really by the President. At least right away. There is no Presidential power that enables whoever it is to determine food pricing. The capitalist markets are the first thing that determine pricing, followed by things like the farm bill, consumer behavior, global political and environmental situations, and farm labor. Let’s break it down:
Economics 101 — Supply and Demand. This should be taught in 5th grade if you ask me. The government doesn’t control this basic economic process. The important thing to realize is that YOU, the Consumer, have the power to create demand. If you want to buy things that increases the demand. If you don’t want to buy things, that decreases demand. You are the ultimate driver of demand. Here are some examples:
If there is a large supply of something, and a high demand, whoever is selling that something determines the price based on what they think people are willing to pay.
If there is a low supply of something and a high demand, whoever is selling the supply can raise their prices as high as they think people are willing to pay.
If there is a high supply of something and a low demand, whoever is selling something needs to lower the price to unload the over supply.
If there is a low supply of something and a low demand, whoever is selling something can price it however they want.
The Farm Bill is where the government gets involved. The government provides subsidies for certain crops — less to keep prices low than to keep farmers of certain commodities from going out of business. (Commodities are raw agricultural products that can be bought and sold on markets to food producers and manufacturers — things like corn, wheat, soy, rice, peanuts, eggs, dairy, meat, sugar, coffee, etc. Each of those commodities has very large lobbying organizations that fight for farm bill subsidies for their farmers.) The last farm bill to pass was in 2018 under Trump and expired last year. Because Congress was not able to agree on a new farm bill in 2023, the only power Biden had was to extend the 2018 farm bill through 2024. Some of the things in the farm bill include:
Conservation
SNAP — formerly known as food stamps
Crop Insurance
Disaster Assistance
New farmer training
Climate Smart Agriculture support and research
We need a new farm bill desperately, but we need a Congress that is willing to cooperate and work together in order to accomplish it. The President alone can’t do that.
Global Politics and War - Much of our food comes from other countries. In the United States, we can not even grow coffee, chocolate, bananas, tea, and many other foods that we enjoy every single day. This is why it’s so important to have cooperative and positive relations — both political and economic — with other countries. Things like war disrupt food supplies, fertilizers, shipping, and other things that are important to sustaining an affordable food system. It’s much healthier, affordable, and pleasant to negotiate in good faith and trade resources than start stupid wars (or keep futile wars going endlessly). This is all I will say on the matter. Except to reiterate that the price of your food depends on good relations with everyone in the whole world. Unless that is, you are willing to give up coffee, chocolate, bananas, and tea. I am not. Tariffs and trade wars are also a part of global politics. When Trump imposed tariffs on China and other European countries during his presidency, it left American farmers in such a bad lurch that he had to create a 16 billion dollar bailout to cover the costs of lost farmer exports. Tariffs create higher prices for consumers. That means you.
Environmental “Situations” - If a flood, hurricane, fire, drought, bird flu, or other man-made or weather event destroys vast areas of food production areas — whether it’s farms, ranches, food production factories, markets or bridges and roads, the supply is going to be less, so the prices will be raised because they can be raised. When things like bird flu or other livestock diseases hit, millions and millions of animals must be "destroyed” to stop the spread. That means the supply will be drastically reduced, and prices will go up. This is why regulation is so important. Why? Because many people, including large companies, want to have the highest profit margins for the least amount of work. Hence, things like listeria outbreaks, deaths from e.coli, and other preventable occurrences. In the past year, there have been an enormous amount of catastrophic floods around the world on almost every continent. That affects food prices.
Farm and Food Production Labor - Farming is incredibly hard work. And while big tractors and chemicals can make it seem easier for farmers, they often add enormous debt and disease to farmers, communities, and consumers. Legal migrant labor is an important part of the farm harvesting system that keeps food prices down. But sometimes, farms and factories take advantage of those laborers, creating slave-like dangerous conditions. This is why it’s important to not just buy on price but buy on trust that your food is made safely for you and your family.
One other note: Inflation is managed and controlled by the Federal Reserve, not the President. And the current head of the Federal Reserve is Jerome Powell, who was appointed by Trump, not Biden.
How to keep your food prices down:
Buy from local farmers as much as possible.
Cook from scratch at home instead of buying processed foods.
Eat foods in season and from your region.
Grow (and hunt!) your own food.
Forget the fads, eat what comes from nature and what your body wants and needs, which is different for everyone.
Lastly, vote for the person who you think will stabilize the economy, build cooperation and trust between all parties in the government and economy, create strong and peaceful relations with all our allies, diffuse the tension in the world, and protect our environment and our communities. And provide help and support when you need it most.
For me, as you probably already know, the best choice is clearly Kamala Harris and Tim Walz. I’m not afraid to endorse them. But I am afraid for our country and our future if they don’t win.
A final note: I tried to keep as objective and simple in this post as possible. It has taken me a lifetime to understand the simple things I just shared with you. Of course, I also think organic is better, but this post isn’t about that. This is about understanding the whole food system and how prices are determined. I hope it helps you understand. Please let me know if I have forgotten anything. Thank you!
Please share this far and wide. You can find the original on my substack:
Understanding How Food Pricing Works
