Currently browsing posts about: Price-of-food

My NYU department is hosting a discussion of this issue: Feeding Resistance and Refugees of Ukraine: The Humanitarian Crisis in Eastern Europe.  March 22, 1-3 pm (EDT).  Free, but register here.

This panel brings together experts and scholars studying Eastern Europe to share their observations and reflections about food access; local, regional and global supply chains; food production and sovereignty; as well as the unfolding humanitarian crisis. Participants include Agata Bachórz (Sociology, University of Gdańsk, Poland), Eszter Kovacs (Geography, University College London), Simone Piras (Agricultural and Food Economics, The James Hutton Institute, UK), and Mihai Varga (Sociology, Freie Universität Berlin, Germany).  Moderated by Diana Mincyte (Sociology, CUNY City Tech) and Fabio Parasecoli (Nutrition and Food Studies, NYU)

And now, for the items I’ve been collecting.   Not much good news to report.

The big picture

• FAO: The importance of Ukraine and the Russian Federation for global agricultural markets and the risks associated with the current conflict: The Russian Federation and Ukraine are among the most important producers of agricultural commodities in the world. Both countries are net exporters of agricultural products, and they both play leading supply roles in global markets of foodstuffs and fertilisers, where exportable supplies are often concentrated in a handful of countries. This concentration could expose these markets to increased vulnerability to shocks and volatility.
• Food Safety News: FSA and others monitring potential food impacts of Ukraine invasion: The Food Standards Agency (FSA) has added its voice of support to the people of Ukraine while reassuring those in the United Kingdom that no related food safety risks have yet been detected. The agency joined a growing list of those expressing backing for those affected by what is happening in Ukraine and concern about… Continue Reading
• Food Dive: How food and beverage companies are responding in Russia: Mars, Nestlé, PepsiCo and Danone are just a few of the large CPGs to stop investments, sales, advertising or other activities as the Ukraine invasion continues.
• Confectionary News: The cost of war on the food front: The list of companies shutting operations in Russia grows daily, however, dozens remain to help out with a different, but no less severe, humanitarian crisis…. Read more

Disruptions in global food systems

• Al Jazeera: Ukraine-Russia war poses new threat to global food security: The crisis in Ukraine and Russia, one of the world’s main sources of grain, fertilisers and energy, presents new challenges in securing food.
• Economist: War in Ukraine will cripple global food markets: But the damage to global food supply will extend far beyond the grain—and last longer than the war itself.
• The Guardian: Ukraine war piles pressure on global food system: Households are facing the prospect of even higher food prices owing to the war in Ukraine, threatening hikes of the kind seen in 2008.
  
• BBC: Ukraine war ‘catastrophic for global food’: The war in Ukraine will deliver a shock to the global supply and cost of food, the boss of one of the world’s biggest fertiliser companies said.

Immediate effect: rising food prices

• Reuters: UN agency warns Ukraine war could trigger 20% food price rise: International food and feed prices could rise by up to 20% as a result of the conflict in Ukraine, triggering a jump in global …
• BBC: War in Ukraine: Crisis is unleashing ‘hell on earth’ for food prices: The head of the World Food Programme, David Beasley, has warned the conflict in Ukraine could send global food prices soaring.
• Time: Shoppers Scramble as Ukraine War Hikes Global Food Prices: The war has already driven wheat prices 70% higher in Chicago this year and is threatening to upend global food trade.
• Bloomberg: War in Ukraine Compounds Global Food Inflation, Hunger Crisis:  Russia’s invasion of Ukraine means the food inflation that’s been plaguing global consumers is now tipping into a full-blown crisis.

And a small ray of sunshine

FAO says the world food price index is higher than it’s been in years, due to reduced harvests, fuel prices, climate change, and Covid-19.

According to the New York Times, the prices of foods in the U.S. are also up—and by 15 percent since early 2020.

Steak, ground beef for hamburger, and turkey are especially costly.

The increases are due to supply chain shortages and higher labor costs and there is little relief in sight. In fact, some economists think prices could rise even more, given the increase in energy prices.

These increases may be hard on consumers, but they are also hard on food banks.

A case of peanut butter that was $13 to $14 before the pandemic now costs $16 to $19…Green beans that used to retail for $9 a case now sell for $14.

BUT, the New York Times also reports:

Despite higher prices, McDonald’s, Kraft Heinz and Coca-Cola post solid earnings.

The Coca-Cola Company, McDonald’s and Kraft Heinz all reported quarterly earnings on Wednesday that were better than expected, despite continuing challenges with the global supply chain and pandemic restrictions in many parts of the world. The enormous scale of each business, as well as their ability to pass on price increases to consumers, appears to have helped them during a time of uncertainty.

Ironic, no?

This study in Nature Food caught my eye: Post-farmgate food value chains make up most of consumer food expenditures globally.

The study examines the proportion of at-home food expenditures received by farmers in several countries, including the U.S.

For the U.S. it reproduces this USDA figure:

The caption:

Farm share of US consumer food expenditures. As reported in the USDA ERS food dollar series, the revenue share of consumer food expenditures has declined fairly consistently for 70 years. Data are from the USDA ERS…The new series is, on average, 3.5 cents per dollar lower than the old series over the 16 years of overlapping coverage. US real per capita incomes grew roughly 2% annually over this period.

The USDA’s Food Dollar series makes this clear.

What this means is that all but about 12 cents of every food dollar goes for processing, retail, food service, and everything else that happens to a food after it is produced.

As the authors of the Nature Food study put it,

There is already growing agreement that the most unhealthy foods are largely ultra-processed products that are high in such ingredients as salt, sugars and saturated fats, that is, manufactured post-farmgate. In the average American diet, for example, only about 30% of calorie intake comes from non-processed or
mildly processed foods.

Ultra-processed foods also occupy a rapidly rising share of diets in developing countries as consumers seek greater convenience and safety. The environmental impacts of ultra-processed foods have not been properly accounted for in many studies, often considering the effects of the primary commodities used for production and disregarding the processing, packaging and distribution stages.

Likewise, the post-farmgate food processing sector is a major source of single-use plastics, greenhouse gas emissions, water use and effluent discharge.

We and the planet would be healthier eating foods that are less heavily processed.  This would not only be good for us, but also for farmers.

One big question about a food system is what it costs, not only at the grocery store but also on expenses we can’t readily see—what economists call the “externalized” costs.  These go beyond the production, transportation, processing, and preparation that get factored into what we pay for food.   Instead, they include what the food system does to health, the environment, biodiversity, livelihoods, and the economy itself.

The Rockefeller Foundation has just produced a report addressing the externalized costs of food: True Cost of Food Measuring What Matters to Transform the U.S. Food System.

Consider this: In 2019, American consumers spent an estimated $1.1 trillion on food. That price tag includes the cost of producing, processing, retailing, and wholesaling the food we buy and eat. It does not include the cost of healthcare for the millions who fall ill with diet-related diseases. Nor does $1.1 trillion include the present and future costs of the food system’s contributions to water and air pollution, reduced biodiversity, or greenhouse gas emissions, which cause climate change. Take those costs into account and it becomes clear the true cost of the U.S. food system is at least three times as big—$3.2 trillion per year.

The report identifies 14 areas of externalization and estimates how much each of them contributes to the total cost of food.

The big ones are the costs to health and the environment but together all add up to $2.1 trillion—on top of what we pay for food at the grocery store, which already amounts to more than a trillion.

The report breaks down each of these areas.  Here is its estimate of the cost of the food system to health—on its own, $1.1 trillion annually.

And here is a recent book on just this topic.  It’s an edited volume of chapters by various authors who take deep dives into specific examples—Egyptian cotton, water in the Andes, Maize, organics, meat, low wages—along with examinations of broader issues of health, the environment, and sustainability.

All of this reminds me of yet another book, which I wrote about briefly when it first came out in 2011.

This is an important topic that demands attention.  Cheers to the Rockefeller Foundation for taking it on.

Let’s hear it for USDA.  It’s asking tough questions about its programs and paying attention to what it’s finding out.

It has just issues a report on barriers to eating healthfully on SNAP (formerly, Food Stamps).

The press release summarizes the report.

The study, Barriers that Constrain the Adequacy of Supplemental Nutrition Assistance Program Allotments, conducted in 2018, finds that 88% of participants report encountering some type of hurdle to a healthy diet. The most common, reported by 61% of SNAP participants, is the cost of healthy foods. Participants who reported struggling to afford nutritious foods were more than twice as likely to experience food insecurity. Other barriers range from a lack of time to prepare meals from scratch (30%) to the need for transportation to the grocery store (19%) to no storage for fresh or cooked foods (14%).

An infographic displays this information.

The report comes in three parts:

• Summary
• Survey Findings from more than 5,000 SNAP participants between May and November 2018. 
• In-depth Interview Findings

From the interviews (page 52)

Overview

More broadly, processed foods—both those purchased at stores for home consumption and those eaten out—were seen as cheaper than healthier options…This perception was the same whether participants lived in urban or rural areas, had children or elderly in the household, or spoke Spanish or English.

Two interview excerpts

Just kind of life circumstances and it makes no sense to me that it is terribly cheap to eat like crap. Eating at [fast food ] every day is going to cost me $5 today and I would eat every day $5 a day but if I tried to go to [store] or some place that had good food and buy good food for a day, even just for myself, for $5, not going to happen. It’s going to be triple that or quadruple that or 10 times that depending on where you go.

Oh, just not processed. Not processed, not frozen. And I don’t really think carbs are very healthy myself, like breads and pastas, I don’t find necessary really. That’s mostly what you can afford, is the cheapest, for some stupid reason in stores, you know?

Policy options seem pretty obvious.  I hope USDA gives them a try.

The National Farmers Union publishes an annual survey of how much of every Thanksgiving dinner food dollar goes to the farmers who produce the food.  Not much.  This year, it’s 12 cents on average.

And the USDA produced this:

Enjoy the holiday!

USDA has just issued a revision to its food dollar series—its graphic explanation of how the U.S. food dollar gets spent.

This tells us that 15.8 cents out of every food dollar goes to the producer; the rest goes for marketing.

Oddly, the USDA does not provide an updated illustration of the marketing components from its previous version in 2006:

What this tells us is that 80% of the cost of food is accounted for by marketing.

Don’t farmers deserve more?