Currently browsing posts about: Price-of-food

The answer: it depends on how much money you have.

USDA’s Economic Research Service has just issued a chart on how much countries throughot the world spend on food on average as a percent of their total expenditures.

As a general rule:

As incomes rise with economic development and urbanization, the share of income spent on food tends to fall while discretionary spending on household goods, education, medical services, and recreation tends to increase.

Rich countries like ours spend less than 10% of our incomes on food—on average.

But Americans with lower incomes spend more than 30% on food.Th

This is why food assistance needs to include income assistance as a matter of policy, especially because people are having to spend more and more on food, even after adjusting for inflation.

Thanks to Lisa Young for this:

The average price of a dozen eggs goes up and up.   It now averages $4.25 a dozen, and that’s for the cheapest kinds.

The New York Times explains

• Inflation
• The war in Ukraine
• Higher feed costs
• Higher energy costs (those hens have to be kept warm)
• Avian flu (44 million hens died or were killed)
• Higher-than-normal demand

It could get worse.  Avian flu infects animals as well as birds and could infect us.

How’s that for a cheery thought.

Small egg farms, anyone?

Or chickens as art, per National Geographic?

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The USDA has just published its latest food dollar series.  (And see below for international data.)

And here’s how all that is distributed.

If you are a farmer, you get an average of just over 7 cents on the dollar.

The real money is in processing, retail, and food service—added value, indeed.

The Food and Agriculture Organization is now providing this information for other countries at its new Food Value Chain domain.  This is an interactive site that is not particularly intuitive to use; it will take some fiddling to lmake it work.

The new FAOSTAT domain, which will steadily expand coverage, has information for 65 countries from 2005 through 2015. It shows that around 20 percent of expenditure on food at home accrues to the farmer, around one-fourth to processing, and nearly half to retail and wholesale trade.

Meanwhile, only around 6.7 percent of consumer expenditure on food away from home accrues to the farmer. That figure is steadily decreasing even, highlighting the need to pay attention to the post farm-gate dimension of the food value chains.

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Food prices are rising.  The American Farm Bureau keeps score.

Every year, the American Farm Bureau, with the help of volunteer shoppers around the country, calculates the average cost for a July 4^th cookout. This year, it will cost about $70 to feed ten people. That’s a 17% increase compared to a year ago. Inflation, ongoing supply chain disruptions, and the war in Ukraine are all contributing to the substantial increase in food prices.

And stay safe!  (Food Safety News has the details on how to avoid food poisonings).

The International Panel of Experts on Sustainable Food Systems has issued a  special report:

The report identifies four structural weaknesses that make foods systems vulnerable to price shocks

• Dependency on food imports
• Dependencies in production systems
• Opaque, dysfunctional, and speculation-prone grain markets
• Vicious cycles of conflict, climate change, poverty, and food insecurity

Doing something about these problems is a tall order.

The IPES-Food panel calls for urgent action to:

• support food importing countries (including through debt relief),
• curb excessive commodity speculation and enhance market transparency,
• reduce reliance on fertilizers and fossil energy in food production,
• build up regional grain reserves & food security response systems,
• and accelerate steps to diversify food production and restructure trade flows.

Here are:

• The special report
• The press release 

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.