By Richard Keller, editor, AgProfessional
Every time we turn around, someone is claiming that a new law or regulation will increase the cost of food. Three examples came across my desk just last week alone.
The first was the economic analysis of how banning atrazine would increase the cost of crop production and result in the loss of thousands of ag related jobs; second was a report from a speech made by Agriculture Secretary Tom Vilsack claiming inappropriate immigration reform would mean higher food prices, and the final news item reported on the pressure California Gov. Arnold Schwarzenegger is under to sign a bill requiring overtime pay for farm workers starting at eight hours per day and 40 hours per week.
In every one of these news reports, agricultural spokespersons of manufacturers, growers, processors and other ag businesses claimed that any change to the status quo would reduce jobs or make labor costs exorbitant and eventually increase the cost of food.
How many times can the ag industry cry wolf? I was part of the public relations "business" for 20 years that issues warnings about changes in law possibly resulting in higher food prices. But yet today, U.S. consumers have some of the lowest, or the lowest overall, food costs in the world.
For myself, I've become numb about the "warnings" that new laws will increase the cost of food. The cost of food is going to go up to a degree no matter what laws are passed or not passed. But from my perspective, the main factor for influencing the cost of food in the U.S. hinges on the farm bill that is enacted every four years.
Depending on the subsidies, "safety nets," free trade/import limitations, conservation programs, federal farm financing and more that is included in the farm bill, the cost of food in the U.S. could go up or be held in relative check.
A cheap food policy has been a little-mentioned goal of both Democrats and Republicans ever since the Great Depression. It isn't nearly as out front as low taxes and cutting the deficit, but if food prices jumped drastically because of a major overhaul in laws and Department of Agriculture programs, "those responsible" would be booted out of office.
As for the ag industry and associations that claim anything and everything will raise the price of food, they are numbing the general population so that few listen and even fewer care what is being claimed. We have not seen drastic jumps in food prices; therefore, the pain of those in production agriculture is not the general concern of others worried about themselves first.
Retail food prices at the supermarket increased slightly during the second quarter of 2010, according to the latest American Farm Bureau Federation Marketbasket Survey. The unscientific survey done by volunteers shows the total cost of 16 food items that can be used to prepare one or more meals was $47.20, up $1.66 or 4 percent compared to the first quarter of 2010. The total average price for the 16 items increased about 2 percent compared to one year ago. Of the 16 items surveyed, nine increased and seven decreased in average price compared to the prior quarter's survey.
Not until prices for a specific food product or the whole market basket of food doubles will the message about food price increases be heard. In other words, it will be an after the fact situation that will earn the public's attention — when it is too late.