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I guess people have forgotten the world before supermarkets (the replacement for traditional 'grocery stores'). You could not buy a pineapple or a banana or an

I guess people have forgotten the world before supermarkets (the replacement for traditional 'grocery stores'). You could not buy a pineapple or a banana or an orange. It was impossible. What made it possible were the literal overthrow of governments by corporations that acted like pirates with a monopoly on a given crop, in combination with technical and logistical revolutions. It's also amazing to see supermarkets getting the blame. Food prices are almost entirely based on trade deals and exploitation by food producers. Supermarkets are just the last mile in a long chain that includes not just food producers and transporters and sellers, but competing markets with politically-influenced tariffs and government subsidies. The price you pay for food has almost nothing to do with the supermarket, unless said supermarket has such a stranglehold on its markets that it can dictate prices up the food chain (Walmart is the only one in the US like this afaik). Yes, America, your food is more expensive now. Because for the past 70 years, your food prices have been artificially lowered as a result of anticompetitive market manipulations, government subsidies, backroom trade deals, and changing global environments. The majority of fresh produce you get in a US supermarket isn't even from this country! And let's not even talk about the sizeable portion of this country that doesn't even have access to fresh produce, regardless of cost. Your ability to "eat healthy" is more of a political act than a gastronomic or commercial one.

fny 4y ago
This true, but it's actually not the proximate cause for higher food prices: excess stimulus and higher energy prices are. 1. Government spent $1T. 2. Fed made it stupidly cheap to borrow money. 3. We have under invested in the oil and gas industry for years, further industry consolidation after the COVID crash has led to high natural gas and diesel prices. We lack the equipment, manpower, and capital to expand. 4. Fertilizer is made using natural gas for feedstock. Diesel is used to transport food. 5. Ethanol is made from sugar cane and corn. It's used as a fuel additive too. This puts further pressure on food prices. 6. Toss in Ukraine/Russia, it gets even worse.
- deleted 4y ago
  [deleted]
- kjeetgill 4y ago
  I hope this doesn't get buried. I don't know enough to agree or disagree, so I'd like to see how people respond.
  - fny 4y ago
    I'm sending you articles pre 2022 from various sources just to make the point these effects were well understood and foreseen before the Ukraine war. While I include articles here about Biden's spending, it's worth noting Trump also spent a truckload of money. Use archive.ph to read anything paywalled. [0]: Energy and Food Security: Linkages through Price Volatility https://www.sciencedirect.com/science/article/pii/S0301421518308486 https://www.sciencedirect.com/science/article/pii/S030142151... [1]: Nat gas and fertilizer https://www.marketwatch.com/story/fertilizer-prices-soaring-as-natural-gas-rally-adds-to-perfect-storm-11633699973 https://www.marketwatch.com/story/fertilizer-prices-soaring-... [2]: Biden's Stimulus Is Stoking Inflation, Fed Analysis Suggests https://www.nytimes.com/2021/10/18/business/economy/fed-inflation-stimulus-biden.html https://www.nytimes.com/2021/10/18/business/economy/fed-infl... [3]: Biden’s ‘America First’ Policies Are Spreading Global Pain (Adviser during Trump admin) https://foreignpolicy.com/2021/05/12/biden-global-food-inflation-commodity-prices-stimulus-money-printing-federal-reserve-dollar-exchange-rate-nationalism/ https://foreignpolicy.com/2021/05/12/biden-global-food-infla... [4]: Yellen Wanted Biden Relief Plan Cut by a Third, Biographer Says (Recent article, but mentions her hang ups in 2021) https://www.bloomberg.com/news/articles/2022-06-04/yellen-wanted-biden-relief-plan-cut-by-a-third-biographer-says https://www.bloomberg.com/news/articles/2022-06-04/yellen-wa... Another thing to consider is that the Fed bought bonds issued by any high-grade corporation in the US. There was record issuance during 2020-2021. This means that those companies now have more cash on their balance sheets they can use to steer the economy going forward... so yes Apple can pay $22 an hour as a base rate now in part because they borrowed $12.5B last year but your local community hospital with razor thin margins can't compete with that. Also, many people were able to retire early from stock appreciation and home value appreciation alone which put a huge dent in the labor force. There are a LOT of distortionary effects that remain to be seen from the stimulus alone. Now add deglobalization to the mix, and everything becomes even worse.
    - 4y ago
thaw13579 4y ago
I'd be curious to learn more about this, any recommended reading?
- hndude 4y ago
  Confessions of an Economic Hitman by John Perkins
- exhibitapp 4y ago
  The Fish That Ate the Whale by Rich Cohen is a great book about the banana industry and government
yojo 4y ago
Per the article, American supermarkets have the same profits (~2%) as cheaper European ones, but much higher fixed costs. Some of these costs are the cost of inputs, but that only explains so much; wholesale food prices are much lower than what you pay at the grocery store. Political wing-nuttery aside, I don't see who you think is the culpable party here. Trade is a boogeyman - most countries import way more of their food than America does. The UK import 46% of its food, the US imports 15%. It's probably not farmers, since most of them seem to be going bankrupt. There is a guy that's made $4 billion on pistachios and almonds, but that's not exactly your food staples. I don't think it's the truckers, I haven't heard of anyone making a killing driving produce around. The article has some good theories as to why it might in fact be the grocery store's fault. America's stores are larger, stock more goods, have higher-touch service, and sell fewer store brand products. This gives them a higher cost structure, resulting in high food prices without high profits. There are grocery stores in America with lower prices, places like Trader Joe's, which sell a smaller selection of store-brand goods in smaller stores at lower prices.
- billjings 4y ago
  Per the article, companies like Tyson upstream in the supply chain are taking record profits. So high wholesale prices due to concentration of suppliers is indeed a major part of the equation.
Natsu 4y ago
The banana republics created were quite awful, no question there. But current government subsidies are there so that we don't see worse food shortages during times when food production is disrupted. Say, some guy far away declaring war on an area that produces a significant fraction of the wheat in the world, or some country that sells a lot of fertilizer and/or oil not selling it so much any more for whatever reason. Yes, they're anti-competitive, but they have a pretty good reason to exist in countries that might frequently get into wars, since they would leave a pretty big vulnerability otherwise. Also, a lot of the food production is sold via futures to stabilize prices and to offset the huge costs of producing it that aren't recouped until months later, but the futures + inflation are kinda working against the producers right now, especially when combined with fuel & fertilizer costs going crazy. I'm not sure about your assertion that supermarkets have so little to do with the prices, they may not take that big a cut overall, but that really depends on how careful you are shopping given that there are plenty of products where you can pay significantly different prices for similar goods. I do agree that it's probably not responsible for most of the worrying increases, but you do still have to mind your loyalty cards and whatnot. I think that in large part, prices are going up due to inflation, global shipping issues, disruption of large areas of farmland, energy costs and lack of fertilizer. And those last two are related due to the Haber-Bosch process for producing fertilizer, fuel is not just for shipping or powering farm machinery. There are plenty of issues, and plenty of reason to worry about how harvests go this year, but I do agree that my worry would be more about the production side, and whether farmers can plant enough, not just the distribution side. Things are probably going to get worse unless we have really great harvests this year, in my view. The time to deal with many of these problems was months ago, before planting started, but the second best time is now.
- deleted 4y ago
  [deleted]
steve76 4y ago
deleted 4y ago
[deleted]
kolanos 4y ago
> In 2016, 87.3 percent of food and beverage purchases by U.S. consumers, including both grocery store and eating out purchases, were from domestic production. The remaining 12.7 percent were reimported food and beverages such as produce from Chile or wines from France. Imports’ share of the U.S. food and beverage dollar has almost doubled over the last two decades from 6.9 percent in 1993, due in part to growing demand by U.S. consumers for year-round fresh produce options and increasing global trade in food and beverages. Imported inputs are used in U.S. food and beverage production, and their share of the U.S. food and beverage dollar has also risen. Imported inputs used by U.S. food companies and restaurants include both food inputs, such as avocadoes from Mexico and cranberries from Canada, and non-food inputs such as natural gas and foreign-made restaurant equipment. In 2016, imported inputs used in domestically produced food and beverages accounted for 4.7 percent of the U.S. food and beverage dollar, up from 3.7 percent in 1993. [0] The data doesn't suggest "a majority", but approximately half of the fruit and a third of the vegetables are imported. When you look at the data, these imports occur out of season domestically. [0]: https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=88950 https://www.ers.usda.gov/data-products/chart-gallery/gallery...

fny 4y ago

This true, but it's actually not the proximate cause for higher food prices: excess stimulus and higher energy prices are. 1. Government spent $1T. 2. Fed made it stupidly cheap to borrow money. 3. We have under invested in the oil and gas industry for years, further industry consolidation after the COVID crash has led to high natural gas and diesel prices. We lack the equipment, manpower, and capital to expand. 4. Fertilizer is made using natural gas for feedstock. Diesel is used to transport food. 5. Ethanol is made from sugar cane and corn. It's used as a fuel additive too. This puts further pressure on food prices. 6. Toss in Ukraine/Russia, it gets even worse.

deleted 4y ago
[deleted]
kjeetgill 4y ago
I hope this doesn't get buried. I don't know enough to agree or disagree, so I'd like to see how people respond.
- fny 4y ago
  I'm sending you articles pre 2022 from various sources just to make the point these effects were well understood and foreseen before the Ukraine war. While I include articles here about Biden's spending, it's worth noting Trump also spent a truckload of money. Use archive.ph to read anything paywalled. [0]: Energy and Food Security: Linkages through Price Volatility https://www.sciencedirect.com/science/article/pii/S0301421518308486 https://www.sciencedirect.com/science/article/pii/S030142151... [1]: Nat gas and fertilizer https://www.marketwatch.com/story/fertilizer-prices-soaring-as-natural-gas-rally-adds-to-perfect-storm-11633699973 https://www.marketwatch.com/story/fertilizer-prices-soaring-... [2]: Biden's Stimulus Is Stoking Inflation, Fed Analysis Suggests https://www.nytimes.com/2021/10/18/business/economy/fed-inflation-stimulus-biden.html https://www.nytimes.com/2021/10/18/business/economy/fed-infl... [3]: Biden’s ‘America First’ Policies Are Spreading Global Pain (Adviser during Trump admin) https://foreignpolicy.com/2021/05/12/biden-global-food-inflation-commodity-prices-stimulus-money-printing-federal-reserve-dollar-exchange-rate-nationalism/ https://foreignpolicy.com/2021/05/12/biden-global-food-infla... [4]: Yellen Wanted Biden Relief Plan Cut by a Third, Biographer Says (Recent article, but mentions her hang ups in 2021) https://www.bloomberg.com/news/articles/2022-06-04/yellen-wanted-biden-relief-plan-cut-by-a-third-biographer-says https://www.bloomberg.com/news/articles/2022-06-04/yellen-wa... Another thing to consider is that the Fed bought bonds issued by any high-grade corporation in the US. There was record issuance during 2020-2021. This means that those companies now have more cash on their balance sheets they can use to steer the economy going forward... so yes Apple can pay $22 an hour as a base rate now in part because they borrowed $12.5B last year but your local community hospital with razor thin margins can't compete with that. Also, many people were able to retire early from stock appreciation and home value appreciation alone which put a huge dent in the labor force. There are a LOT of distortionary effects that remain to be seen from the stimulus alone. Now add deglobalization to the mix, and everything becomes even worse.
  - 4y ago

thaw13579 4y ago

I'd be curious to learn more about this, any recommended reading?

hndude 4y ago
Confessions of an Economic Hitman by John Perkins
exhibitapp 4y ago
The Fish That Ate the Whale by Rich Cohen is a great book about the banana industry and government

yojo 4y ago

Per the article, American supermarkets have the same profits (~2%) as cheaper European ones, but much higher fixed costs. Some of these costs are the cost of inputs, but that only explains so much; wholesale food prices are much lower than what you pay at the grocery store. Political wing-nuttery aside, I don't see who you think is the culpable party here. Trade is a boogeyman - most countries import way more of their food than America does. The UK import 46% of its food, the US imports 15%. It's probably not farmers, since most of them seem to be going bankrupt. There is a guy that's made $4 billion on pistachios and almonds, but that's not exactly your food staples. I don't think it's the truckers, I haven't heard of anyone making a killing driving produce around. The article has some good theories as to why it might in fact be the grocery store's fault. America's stores are larger, stock more goods, have higher-touch service, and sell fewer store brand products. This gives them a higher cost structure, resulting in high food prices without high profits. There are grocery stores in America with lower prices, places like Trader Joe's, which sell a smaller selection of store-brand goods in smaller stores at lower prices.

billjings 4y ago
Per the article, companies like Tyson upstream in the supply chain are taking record profits. So high wholesale prices due to concentration of suppliers is indeed a major part of the equation.

Natsu 4y ago

The banana republics created were quite awful, no question there. But current government subsidies are there so that we don't see worse food shortages during times when food production is disrupted. Say, some guy far away declaring war on an area that produces a significant fraction of the wheat in the world, or some country that sells a lot of fertilizer and/or oil not selling it so much any more for whatever reason. Yes, they're anti-competitive, but they have a pretty good reason to exist in countries that might frequently get into wars, since they would leave a pretty big vulnerability otherwise. Also, a lot of the food production is sold via futures to stabilize prices and to offset the huge costs of producing it that aren't recouped until months later, but the futures + inflation are kinda working against the producers right now, especially when combined with fuel & fertilizer costs going crazy. I'm not sure about your assertion that supermarkets have so little to do with the prices, they may not take that big a cut overall, but that really depends on how careful you are shopping given that there are plenty of products where you can pay significantly different prices for similar goods. I do agree that it's probably not responsible for most of the worrying increases, but you do still have to mind your loyalty cards and whatnot. I think that in large part, prices are going up due to inflation, global shipping issues, disruption of large areas of farmland, energy costs and lack of fertilizer. And those last two are related due to the Haber-Bosch process for producing fertilizer, fuel is not just for shipping or powering farm machinery. There are plenty of issues, and plenty of reason to worry about how harvests go this year, but I do agree that my worry would be more about the production side, and whether farmers can plant enough, not just the distribution side. Things are probably going to get worse unless we have really great harvests this year, in my view. The time to deal with many of these problems was months ago, before planting started, but the second best time is now.

deleted 4y ago
[deleted]

steve76 4y ago

deleted 4y ago

[deleted]

kolanos 4y ago

> In 2016, 87.3 percent of food and beverage purchases by U.S. consumers, including both grocery store and eating out purchases, were from domestic production. The remaining 12.7 percent were reimported food and beverages such as produce from Chile or wines from France. Imports’ share of the U.S. food and beverage dollar has almost doubled over the last two decades from 6.9 percent in 1993, due in part to growing demand by U.S. consumers for year-round fresh produce options and increasing global trade in food and beverages. Imported inputs are used in U.S. food and beverage production, and their share of the U.S. food and beverage dollar has also risen. Imported inputs used by U.S. food companies and restaurants include both food inputs, such as avocadoes from Mexico and cranberries from Canada, and non-food inputs such as natural gas and foreign-made restaurant equipment. In 2016, imported inputs used in domestically produced food and beverages accounted for 4.7 percent of the U.S. food and beverage dollar, up from 3.7 percent in 1993. [0] The data doesn't suggest "a majority", but approximately half of the fruit and a third of the vegetables are imported. When you look at the data, these imports occur out of season domestically. [0]: https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=88950 https://www.ers.usda.gov/data-products/chart-gallery/gallery...