, , ,

Maybe because consumer food prices have increased by 5-10% on average and you live on a shoestring?

The ‘expert’ interviewed in this article is sadly clueless. She says it’s easy to save money when shopping: pay attention to sales and don’t waste food. That’s the kind of advice you give to the 1% (or at least the 5% — the top 1% probably don’t care), not the people at the bottom who can’t afford to eat. These people aren’t throwing out their spinach because it has some yellow dots; they are struggling to afford basics. There’s a difference between wasting your food and not being able to buy yourself food.

A lot of people will put the blame on Big Ag or the supermarkets for this, but let’s break down a grocery store price and give credit where credit is due.

For non-processed foods (fresh fruits, vegetables, eggs) or lightly processed foods (canned or frozen fruits and vegetables, meat and dairy, bread), the basic pipeline is:

  1. Farmer produces
    1. Cost to farmer, from smallest to largest expense:
      1. seeds for produce
      2. gas for equipment
      3. 2-8 months of labor and employment of additional labor [if selling large-scale]
      4. upkeep of animals, including rotating purchase of new animals
      5. upkeep of equipment, including buildings
      6. purchase of new equipment, including building upgrades for safety standards and/or other requirements to sell farm products
      7. land tax and mortgage
  2. Handoff to distribution center (or processing center)
    1. Farmer is paid: usually 25% of store price at a maximum
    2. Possible processing
      1. Costs to processor vary by process, but may include (again from smallest to largest):
        1.  washing
        2. packaging
        3. transport
        4. safety standards
        5. labor
        6. equipment
    3. Food is lost here, since processors are discouraged (and sometimes forbidden by law) from accepting ‘imperfect’ produce, such as:
      1. apples that are not shaped like stock photos of apples
      2. eggs that are ‘irregular’ in size (that is, neither large nor extra-large)
      3. carrots that have multiple roots on a single stalk (shaped like a tooth)
      4. … you get the idea
    4. NOTE that this does not include food that SHOULD be excluded from human consumption, such as milk from cows being dosed with antibiotics: that is rightly excluded from processing. Everything under (c) is safe to eat but barred from stores.
  3. Ship to grocery store
    1. Processor gets paid (about 50% of grocery store price)
    2. Costs include (no order, because I’m not familiar enough with groceries to rank them):
      1. labor (unbox and put on shelves; checkout; custudial work in store)
      2. safety standards, insurance, mortgage, utilities — basic business expenses
      3. food that has become unsaleable in-store: for example, those tomatoes you dropped that went splat
  4. Sale
    1.  Grocer gets paid.

In other words, if you buy your dozen eggs for $3, the grocer gets about $1.50, the processor (who cleans, grades, and cartons the eggs) gets about $1, and the farmer gets about $0.50. (Prices may vary depending on location, but this is a general breakdown.)

It’s in this case sort of hard to blame the producers.

Some more likely causes of hunger?

  • Housing prices: too much income goes into mortgage/rent, which doesn’t leave a high enough percentage for food
  • Flatlined economy: as gas prices rise, farmer and processor costs increase, also increasing the price of food. If incomes don’t increase in step, food prices inflate. Once they’re up, they stay up, waiting for inflation to catch up to them — which it hasn’t.
  • Overly stringent safety standards: like everyone else, I believe that a safe food supply is important. However, I also know that catered food plates (especially in non-urban locations) are thrown out with perfectly good food on them, because it is illegal to donate or because food banks won’t accept fresh produce. (Some food banks, like Toronto’s Second Harvest, are really good about this.) I know that “ugly” produce, which sells at the farmer’s market or at pick-your-own, can’t be sold in stores. A basic principle of economics is that decreased supply increases demand (and therefore cost); we should campaign for ugly food!

UPDATE: You can campaign for ugly food here