Food and the Economy

[Treble Bolt 1,122]

I work at a meat locker. I have to keep tabs on the meat market (which I never cared about before this job)....today, we learned that the cheapest meat available, pork, just went nearly $2.00 PER POUND!!! I know why this happening and it's not hard to find out why if you don't already know. But this something I'd like to talk about. Milk prices (due to the farm bill) is also going to go up a great deal.

Crop prices themselves (especially corn) are dropping, so more farmers are going to ditch crop for animals or farm a more profitable crop than corn for this year. This will (down the road) drive up corn prices a LOT because less corn (which is mostly used for animal feed) and higher demand equals simple economics.  I also keep up on crop prices in general because I live in the most fertile part of the nation as well as knowing that crop prices affect meat prices (and vice versa). 

All in all, food is going to go up in price while the economy elsewhere (i.e. our paychecks) stay stagnant.

 

So with all that exposition out of the way, lets discuss!

 

For you farmer bronies out there, what do you see in your area about the way the Amercian food economy is going in the next 3 or so years? 

For those overseas, how do you see the American food market affecting you? Also, what's the food economy like in your area, and how(if) do you see it affecting America?

 

For those not concerned with the economic aspect of food, what do you, as someone who eats food (we all do) see as far your wallet is concerned? If you don't buy your own food yet, what do your see your family doing?  Do you see your diet changing?

 

What do you see in food economy, and where do you think it's going?

[Shanks 10,811]

I work as a dairy clerk/backup checker at a grocery store and rising food prices are becoming more and more obvious to me as I am nearing 7 years there, the store I work at is known for having some fairly good prices but even my store isn't exempt from this. I have noticed less business coming in even with major holidays not being as busy as they were in previous years, as someone who is responsible for ordering product I have to write lighter and lighter loads and hours are being cut to the point where it is becoming increasingly difficult to get anything done. Things will get better as more and more people are waking up to what is going on but I fear things will likely have to get even worse before they get better, I just hope it dosen't get to the point of Weimar Republic Germany where people had to literally take a whole wheelbarrow full of cash down to the store to get a loaf of bread, or worse still like modern day Zimbabwe where $100 trillion dollar bills are in circulation. Things won't get better until the Federal Reserve stops printing money out of thin air and all of the subsidies, kickbacks and other regulations that encourage monopolistic behavior and nanny state nonsense is put to an end.

[Treble Bolt 1,122]

@,  It's strange that fewer people are purchasing food. Of course, it doesn't help that highly processed foods are cheaper than quality foods. Also, I recently heard on NPR that 7 out of 10 people in the US rely on food stamps and that number is likely going to raise. My husband and I make too much for food stamps and yet, we struggle to get decent food. The cheap stuff would be easy for us to buy, but I want my husband and I to eat healthy. It's like we are being set up for failure in terms of our health and what we eat. We mainly live off of tuna/sardine cans, eggs, apples, bananas, bread and rice. REAL vegetables (not lettuce and corn) are really expensive, and the fruit we get only when its on sale. Canned tuna/sardines is the cheapest fish source we can get, and we don't eat much meat and rarely any dairy (it's too expensive). We also do not eat ANY pork products, and beef is a rare "treat".  We also eat a lot of Ramen. What kind of diet is that? it's not diverse, and yet, after all the bills, it's all we have left. I can't afford good cooking foods (to make a homecooked meal), and we want to avoid to processed stuff. 

We are very frugal people too, no internet, tv, or smartphone (we have the cheapest possible straighttalk), or any debt. I don't know how indebted people get by, as well as those with all the "extra" amenities Americans have. 

[Shanks 10,811]

It's strange that fewer people are purchasing food. Of course, it doesn't help that highly processed foods are cheaper than quality foods. 

What I have noticed is that more and more people are purchasing frozen, canned and other non perishable foods because they are cheaper and last longer. I think why the processed foods are cheaper is because the organic foods have much more stringent regulations placed on them forcing them to jump through more hoops which makes them have to raise their prices in order to make up the difference. You look on the back on the labels on many foods and they sound more like chemcial bases in a science experiment than actual food. There is a greater demand among certain segments of the general public for actual quality food but there are also a lot of food companies picking up on this and engaging in deceptive labeling practices to make their food appear healthy when it is in fact not. This is not to say that there isn't legit stuff out there but it does make that stuff much harder to find than it should be.

 

 

We are very frugal people too, no internet, tv, or smartphone (we have the cheapest possible straighttalk), or any debt. I don't know how indebted people get by, as well as those with all the "extra" amenities Americans have. 

I don't know how indebted people get by either, some people are through no fault of their own because of unexpected expenses like someone gets sick for example but a lot of people are extremely frivolous and irresponsible with their spending. I am no millionaire but I make enough to where I can pay my bills and have a few extras as well with very little debt, I rarely use my credit card and when I do I can pay it off in most cases before the interest kicks in.

[Scootalove 10,684]

I would say that with economy declining, people are buying frozen or canned food that is cheaper than regular food. I'd say that It's mostly hard to buy the food that you want, without having to spend a lot on the food.

[Rift enchanted 378]

It also depends a lot on the store you're buying it from. Like when I went to walmart wow! Their prices were way higher than this other store

[Frith is Magick 1,471]

I work in a grocery store, so I've noticed that prices can get out of hand, especially with produce. People still buy real food, but lower quality products are selling more and more. The sad irony is that the long term cost of an unhealthy diet can be just as bad if not worse than the cost of buying healthier foods. Another big trend that I've noticed is that the store will be dead unless there is a sale, and people's purchases more or less match whatever items are discounted. 

 

Another harmful thing is that the growers are by their very nature going to be at least one season behind the economy, which will increase supply-demand mismatch and price volatility. Additionally, if meat prices go up, making it more profitable, production will move from crops to livestock (basic economics), but by the time supply increases (animals aren't born ready to slaughter, basic biology), feed prices will have gone up (because of lower production), and the market will be flooded, leading to lower prices and profits. The sad truth is that any farmer/ rancher with the slightest bit of financial sense will focus on producing whatever will bring in more profit (@Treble Bolt correct me if I'm wrong, but if farm costs are high, you'll want to focus on producing more to increase income).

 

From a long-term perspective, it is best to produce meat, feed crops, consumer crops, and vegetables at an equilibrium point, which will (theoretically) stabilize costs, however, because this is not a viable strategy in the short-term due to market fluctuations, there will be a price-raising mismatch. This is a downfall of modern food economics: the economy is fast-moving and volatile, but crops and livestock take time to raise (you don't need to be a farmer to know that), and the fact that foods are perishable means holding a sufficient stock to negate this is impossible. I'm not a farm boy, but a brief look at food economics will show the inevitability of high food prices and low income for farmers/ranchers. Additionally, if farm costs go up, it will be harder for actual farms to stay afloat, facilitating the dominance of larger factory farms and processed foods (I fail to understand how having more steps in a value chain reduces cost). My long-term forecast: Cost will go up, even if prices remain constant, the loss will be seen in a reduction of quality, and farming/ranching will become less and less profitable.

[Shanks 10,811]

 correct me if I'm wrong, but if farm costs are high, you'll want to focus on producing more to increase income).

Usually that would be a good idea but certain policies are so ridiculously skewed that farmers are often literally paid to not grow certain crops and of course there are all the subsidies and kickbacks given to the big aggra businesses and regulations which make it more difficult for smaller farms to compete. The government is starting to crack down on local farms and co ops due to their increase in popularity as well due to the influence of the big companies as them becoming an affordable, viable option is a serious threat to the monopolistic corporations bottom line. You know that a government is completely criminal when it tells people what they can and cannot eat.

[Frith is Magick 1,471]

 

 

Usually that would be a good idea but certain policies are so ridiculously skewed that farmers are often literally paid to not grow certain crops and of course there are all the subsidies and kickbacks given to the big aggra businesses and regulations which make it more difficult for smaller farms to compete.

Fair enough, that ties into what I was saying on producing more of what is in demand, except it adds the dimension of having to navigate competition and government policy as well as the economic flow. As for the line you quoted, I probably should have specified that when costs are high it is better to not more, but produce more of whatever crop is profitable.

[Treble Bolt 1,122]

@@Frith is Magick,

Government policy far outweighs economic flow. Economic stability is completely out of the picture when it comes to most farmers in America. 

 

From a long-term perspective, it is best to produce meat, feed crops, consumer crops, and vegetables at an equilibrium point, which will (theoretically) stabilize costs, however, because this is not a viable strategy in the short-term due to market fluctuations, there will be a price-raising mismatch. This is a downfall of modern food economics: the economy is fast-moving and volatile, but crops and livestock take time to raise (you don't need to be a farmer to know that), and the fact that foods are perishable means holding a sufficient stock to negate this is impossible. I'm not a farm boy, but a brief look at food economics will show the inevitability of high food prices and low income for farmers/ranchers. Additionally, if farm costs go up, it will be harder for actual farms to stay afloat, facilitating the dominance of larger factory farms and processed foods (I fail to understand how having more steps in a value chain reduces cost). My long-term forecast: Cost will go up, even if prices remain constant, the loss will be seen in a reduction of quality, and farming/ranching will become less and less profitable.

 

All of this already happened in the 1970's. Farms are already heavily monopolized. The "Family Farm" is just about extinct in America, and with the way legislation is going, the will be completely gone in the next 5 years. All that is out there is huge corporate conglomerates that can get away with a great deal of sickening things that create dangerous foods to eat with the guise of being "natural" and "healthy". These companies have so much money that are able to lobby to the point of controlling the legislation about farming across the board. They also have the money to get away with the additives unnatural hormones,GMO's, CAFO's, deplorable animal conditions, over-immunizations, and the overall fact that you really don't want to know what you are eating. The USDA is controlled by these conglomerates, the FDA (don't get me started on pharmaceuticals, that's a different topic but it money binds all this together) and all legislation passed by the politicians who are paid by these monopolies.  Small farmers do not have the money and are thus subject to extremely heavy regulation. Small businesses of every kind suffer from this fate. At our store, we get an inspector once if not twice a month. If the tiniest thing is wrong, we are written up (we are always written up). Whereas at Hormel (one of the largest meat producers in the country, which btw, the headquarters are less than 2 hours away from where I live/work), hires their own "inspectors," and yet my boss (who used to work for them for nearly 20 years) told me stories about some people accidentally got frozen and died (while he worked there), animal feces being ground up with meat, as well as very ill animals being processed and ending up on store shelves. These inspectors go through the motions but do not ensure public safety or even health standards in regards to the processing and the animals being processed. And that's just animals....Crop farmers are just as bad! Government Subsidies (which are only available to mega farmers) is what pays their bills, crops are not only genetically modified but also strictly regulating on WHICH crops are produced. The corporate farmers determine the prices of all crops, even if it's "organic" or specialized. They also work with the DNR to get the most out of their land, even if it spills chemicals into nearby rivers and watersheds due to soil erosion. Small farmers do not have any of the luxuries mega farmers have. Land is legally being swindled out of the small farmers hands, taxes on small farmers is through the roof (my parents in law pay over 6,000$ a year on their land (we have 400 acres), while a family related farm (which is a mega farmer, with over 7,000 acres of land) pay about $1,200 on their entire setup (they are horrible braggers, and do all they can to put my husband's family down, but they do that with everyone). We are not the only ones suffering, all small family farms are and many areas have it worse than us.

 

Want to figure out what's wrong with this country, follow the dollar trail....

 

Government, corporate BS besides, we are also not looking at the food economy in relation to the weather. Climate change is happening, and it's here to stay. Scientists have already said there's no stopping it, so what's going to happen to food from that? It's another thing to consider because that is also affecting food prices for the long haul.

[Frith is Magick 1,471]

--snip--

 I didn't know it was that bad in the U.S., in Canada we still have smaller farms and ranches (I had a relative who owned a farm, and hen it was sold, it was to a local farmer), though those are gradually being replaced. The fact that it has managed to go so far down there is both saddening, especially considering that this is shaping up to be an international problem, both from an economic and health stance.

 

What you're saying is am unfortunate truth. In addition to having the money to lobby, large corporations, despite having lower tax rates, are still a huge source of revenue for the government due to size alone, not to mention all of the "contributions" they make. Some genetic modifications have done great work (nutrient enriched rice in third world countries, disease-resistant crops), but not all of them are so beneficial, and while I am strongly opposed to any sort of fear-mongering, there needs to be more care and review, which there isn't. In theory competition and the economies of scale that these corporations command should be beneficial to the consumer, but somehow that simply isn't the case.

 

I hate to say it, but the consumers in the food market are screwed either way. The population is growing too large for conventional farming methods to satisfy demand, but at the same time, the growing corporate methods are reducing the quality of food and the environment, all under the protection of the government fat-cats who line their pockets with corporate dollars. Food isn't exactly optional, meaning our choices are quickly being narrowed down to starvation and poison. Where the traditional economists and corporate types see growth and endless possibility, I'm getting a lemming's eye view of an approaching cliff. Individuals are pushed on by the wave whether they want to go or not, and the only way to change that is to change the wave, but sadly it is not individuals that matter, it is dollars, and the average person is worth a whole lot less than the large corporations and the millionaires and billionaires who run them. Say what you like about the food market, it is not something most people can really escape.

 

@, GMO and genetic diversity are connected, but they are not the same issue. Consumer bananas are all the same, grown through grafting a single species. Genetic modification is also different from artificial selection. Genetic modification allows certain attributes to be modified which can be beneficial, the issue arises when GMO crops are grown in place of other crops. It is the artificial selection of modified crops which limits diversity. I don't disagree about the detrimental effects of limited diversity, a single disease could cause a global-scale famine, and the chance of a resistant gene emerging would be limited. GMO products are not inherently bad, it is the way in which they are used that is detrimental.

Edited April 4, 2014 by Frith is Magick

[Shanks 10,811]

The population is growing too large for conventional farming methods to satisfy demand

What isn't said nearly enough about GMO foods is the risk they pose to the food supply, because of the artificial way in which they are produced via genetic manipulation particular genetic traits are being weeded out which is causing a dramatic decrease in genetic diversity. Why this is a threat to the food supply is that plants like animals can also contract diseases and genetic diversity is a safeguard against said diseases by allowing the plants to adapt to them and allow the reproduction of traits which encourage immunity. To put it simply what is going on is the plant equivalent of incest, without said genetic diversity if a pandemic were to occur it could cause a global famine. The reason why these plants are manipulated in such a way is because pesticides have been overused so much that insects continue to develop immunity and the pesticides used became so powerful that crop had to be genetically modified in order to survive the exposure to these toxic chemicals. If these monopolistic practices and burdensome regulations were lifted allowing smaller farms to compete and remove the nanny state regulations and crack downs on organic markets and co ops than I believe the free market will be able to kick in and address this issue. It is not that America dosen't have enough land and resources it is that they are not being used properly, corporations are taking shortcuts which are proving costly to the environment and to the health and well being of consumers as well.