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article imageConsumers, Farmers Protest Rising Food Prices

By Carol Forsloff     Jan 13, 2009 in Food
People in our town of Natchitoches, Louisiana are concerned that although the gas prices are $1.63/gallon, food prices are still up. We had been told that the increase in food prices had to do with the cost of delivering groceries.
Nevertheless, we haven’t seen any decline in the cost of food around here.
A few months ago, a mixture/salad used like a relish on muffalata sandwiches, a staple of Louisiana, cost about $10. Now it is $12. That relative difference in price has been across the board on many items. We paid less than $3.00 for a half gallon of V8 only to find it priced at $3.69 our last visit. That price difference occurred only since the late fall.
So what do agriculture sources say about all this? According to ERS/USDA briefing, the following factors were said to be behind the uptick in food prices:
• Stronger global demand for food
• Increased U.S. agricultural exports resulting from stronger demand and a weaker dollar
• Weather-related production problems in some areas of the world
• Increased use of some food commodities, such as corn, for bioenergy uses
The overall increase in food costs within the year from 2007 to 2008 was reported to be 7%. Now that’s the USDA estimate. Research reveals, however, that the increase was closer to 40% to 50%, impacting the poorest communities most. That was comparing the earliest part of 2008 with the same time the previous year.
The ERS/USDA and other government agencies report on the Consumer Price Index (CPI), but that doesn’t tell the story.
Farm agencies notice that even though oil and grain costs are down, food prices remain up. According to a report quoted by the Farm Press, “Why Aren’t Food Companies Reducing Prices?,“ authored by the Renewable Fuels Association, “the excuse for these prices hikes given by big food companies does not pass the smell test.” The Farm Express suspects that food processors and big grocery guys are sticking it to the farmers and the consumers right and left. The excuse that ethanol production decreases food production costs isn’t born out by the facts.
So one more area for the Barack Obama administration to attend to and investigate appears to be the food development and distribution. The Farm Express will continue to inform and support consumer needs, along with the farmers, according to their stated position.
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