How the U.S. government could lower food prices
vice.com
vice.com
Hilariously, they mention price and wage controls during WWII as an example of it working! I think that's up for debate to put it mildly. One famous thing that came out of wage freezes at that time was health insurance provided by employers. Had to attract talent somehow and salaries were capped.
More broadly, I don't believe humans have the capacity to foresee second and third order effects of policies like these which is what makes them so dangerous.
I think they have the capacity. We have pretty strong evidence for that. But I do not think they have the will. So at least that would make it possible to solve, albeit easier said than done is quite the understatement. The distinction is important though.
Cause that isn't what I got from it; term negotiated and contracted prices aren't "price controls." The suggested fix here is industry standard practice in many other business-to-business markets where the buyer selects a seller based on not just on how much they are selling it for today, but how long or for how many units they will guarantee the price for. Which is what is being talked about. AKA food supplier negotiates a price and guarantees it for a year.
So, its not a bad plan. Forcing the supplier to manage their costs vs. just passing them on at will gives the supplier an economic interest in suppressing their own suppliers and increasing their delivery efficiency. It pushes some of the price risks away from the individual consumers, who don't have much individual purchasing power.
The only way to achieve reliably low prices is to allow deflation to happen, which means government gets out of the way of innovation, lowers regulatory barriers, and stops printing so much money.
e.g.: https://www.maine.gov/dacf/milkcommission/minimum.shtml
Again, as you point out, it is another example of reliability being more important than free market pricing.
My point here is that "economists say prices control are bad" is an oversimplification. Importantly, economists know how price controls effect markets and sometimes they can be effective tools.
Maybe olive oil prices have gone up and some others or lots of packaged and processed foods. But from a PRICE PER NUTRITION standpoint (real food like beef, eggs, etc), I dont find food costs all that bad.
Price per calories for junk processed foods like snacks and juices is a different argument I guess.
I will also add when times are tough you can quit spending money entirely on carbohydrates. Your body cant produce fats or proteins but It can produce all the glucose it needs endogenously. You can supply yourself fats and proteins your liver will take care of making glucose just fine.
The prices pre- and post- pandemic are undeniably higher for staples. I used to pay $4.99/lb of ground beef at regular sticker prices at Trader Joes, Whole Foods, etc. back in 2019. Those same offerings are consistently $5.99+.
To some it's certainly a small increase, but I see similar impacts across other products as well, and it all adds up. For example, Kerrygold butter used to go for $5.99 and now regularly goes for $7.99. Almond Milk used to be $3.99 ($2.79 on sale), and now routinely goes for $5. Most Cold Brew products I purchase have gone from $5.99 to $6.99 or $7.99. And Cream Cheese is one of the worst - 2 bars of Philadelphia Cream Cheese used to be $6 and now regularly sell for $9 - $10.
It's everywhere. I'm in NYC / LA, so might be different elsewhere (I'm sure these prices look insane to most people outside of cities).
The most expensive beef I buy is prime top sirloin steaks at costco for $9-10/lb and ribeye roasts (that I cut up into steaks) at the local halaal market are $8/lb or less. Tenderloins for kebabs and filet mignon is $6-8/lb at Ranch 99 or Shun Fat. The most expensive chicken I get is Costco tenderloins for chicken tenders that sometimes rise to $7/lb but otherwise chicken breast is $3.5/lb or less. The oxtails and neckbone for good beef stock are more expensive than most of the meat I usually eat!
I suspect I'm just really privileged and don't know the meaning of a food desert. The number of ethnic grocery stores here in SoCal guarantees that it's easy to find a cheap source for every ingredient imaginable. The key is to shop there and not at the big names like Safeway, Vons, Ralphs, Albertsons, etc.
Unit prices have gone up for processed foods, core protein and vegetables considerably and, in many cases, the quality has decreased.
The additional flavor makes food seem more filling, and isn't expensive. Also: potatoes.
Convenient junk food is quite expensive compared to “real food” like meat, uncooked pasta, fruits, vegetable, etc which are healthy but require some preparation.
The argument then goes: “well, ok, but poor people don’t have time to cook”. Which again rings false. The poor people I’ve known have an abundance of time and are not working 3-4 jobs to make ends meet.
And prep is easy, I guess my tastes are simple - beef, eggs, salt maybe a litle hot sauce. I can cook 3 pounds of ground beef and add about 10-12 eggs in a 12" fry pan and have 3-6 meals in containers in about 45 minutes.
I have some food allergies and cook everything from scratch at home so I know it can be cheap to cook yourself but there are some processed foods that are just cheap for the calories especially things on sale.
Other factors like limited transportation and space in a backpack or bag to carry home can make bulk savings harder.
Yeah you can eat rice and beans for cheap, but that’s not really a completely nutritious diet. I’ve eaten it a lot!
What about 5 years ago?
This is by definition not scalable, so your experience has nothing to do with the experience of typical families.
https://www.diamandis.com/hubfs/Diamandis_March_2017-Theme/I...
https://conscienhealth.org/wp-content/uploads/2020/02/2018-O...
Historically, that doesn't work out so well.
If the USA withdrew from this, farmers would likely switch away from corn. Within a few years we could 10x meat production. Large open pastures producing grass fed meats would be a far better choice.
First, you can't convert all current farm plots owned by independent farmers into contiguous grazing land, and second, animals need tons of vegetable nutrition. Lots of that corn is already diverted to animal feed - grasslands aren't going to be more productive for animal calories than engineered corn. That's why we actually need to be decreasing meat production - it's incredibly wasteful.
If you believe we could 10x meat production by replacing corn (which... we can't), we could just 200x vegetable production instead. Obviously that makes no sense to replace vegetables with vegetables on the same land and get orders of magnitude more crops.
The conclusions you should be drawing is that we should stop subsidizing corn for HFCS as an unhealthy high-calorie filler and instead subsidize nutritious vegetables like legumes.
I realize there are many people who want to reduce meat production.
I absolutely am optimistic about a tiny footprint synthetic meat production that competes with top quality steaks.
But until that exists, we should be increasing meat production of all kinds.
Oh and farmers pass on your new high taxes in shape of food inflation. Pretty big protests going on across europe right now.
The vast majority of cows are already pasture raised in the US. Those feedlots with packed pens serving tons of corn feed that most people think of when they think of factory farming is only the last step of the process called finishing that improves the fattiness and flavor of the meat for human consumption.
The corn that's used for bioethanol is actually later fed to cows at those feedlots as distillers grains [1]. It accounts for a significant fraction of animal feed so eliminating bioethanol would make beef more expensive, not cheaper.
Isn't most corn fed to animals in factory farms?
Grass fed all the way.
Wow, way to switch from one environmental disaster to another, even bigger one.
For example, one of the first items mentioned in the article is how prices are regulated in France, which is really not traditional price controls:
> France has set up a food pricing system that will sound foreign to American ears: Consumer goods companies like PepsiCo must negotiate with the country’s grocery stores on prices in the stores during a set period. If they can’t come to a compromise, PepsiCo won’t be able to get its products on the grocer’s shelves. The negotiations provide French consumers with a small but valuable piece of power, and President Emmanuel Macron has been trying to use the system to his advantage as he aggressively pushes to get the country’s high food prices down, saying they should reflect the fact that the prices of many raw materials have recently declined.
That's not really how people think of traditional price controls, it's just saying that prices must be negotiated once per year. Of course, what the article leaves out, and which is mentioned in the link at https://www.reuters.com/world/europe/french-bill-moves-food-..., is that only negotiating once per year means that if prices are set high in the beginning of the year, there is not a chance to reset lower until the following year. So consumers get the benefit of higher-stakes negotiating power, but you've got to live with that outcome for a year.
I also despise the "blame inflation on corporations just taking more profits" line of thinking, because it's usually made from as a braindead assertion without any follow up. That is, basic economics 101 says that competition should keep corporations from taking undo profits. So if corporations are able to drastically increase their profits without new competition coming in, it means that either (a) there is something about the market that is fundamentally broken, e.g. monopoly pricing power or collusion, or (b) the price increases really are warranted, and companies are worried about price pressures in the future. That is, so often I see the argument being made of "companies are gouging us for profits, we need price controls!" as opposed to "companies are gouging us for profits, what is broken in the system that is allowing this to happen in the first place?"
This is absolutely price controls, complete with their inevitable result: The non-availability of the good.
If you don't like the price of your Pepsi, buy Coke. Or buy the store brand. Or do your health a favor and don't buy that garbage food in the first place.
Something does need to be done about that type of situation; in a properly working free market the competitor would gleefully accept having 100% of the market and waiting for the high price supplier to go bankrupt or lower their prices. Instead you're seeing what appears to be cartel-like 'we've got your back' from suppliers. This was most recently visible with eggs.
Incredible amounts of marginal farmland that comes in and out of production based on market prices.
(so, to be crystal clear, price caps are a horrible idea).
There's also farm regulation that manipulates farmland going in and out of production artificially. It already isn't driven solely by the free market.
A literally bankrupt company giving economic advice..
Relevant: https://cdn.mises.org/Forty%20Centuries%20of%20Wage%20and%20...
https://news.ycombinator.com/from?site=mises.org
You can post articles from Vice, Oxfam or even Jacobin Mag. Just don't share the canonical sources debunking socialist canards. Articles from laissez-faire economists eloquently describing the problem of economic calculation aren't valued here. HN prefers the pop-culture journalists at Vice Magazine to rehash the virtues of price controls.
Republicans would scream "less government is better" and block it like their lives depended on it.