Been to the grocery store lately? Prices are up and food packages are shrinking. Call it stealth inflation.
There’s no hiding the skyrocketing price of gas that hits you in the face every time you fill up the tank. But food? Last year’s steep rise in the price of wheat, corn, coffee, and chocolate is now rippling through the food chain, but the food industry is working overtime to mask food price inflation.
Last October, Obama’s Agriculture Department predicted food price inflation, indicating in a report that food prices would “accelerate” in the final months of 2010 and through 2011. The acceleration is here and has taken many forms.
Food packages, cans, and bottles have been downsized.
The “new” jar of peanut butter is still the same size (and price) as the old 9-ounce jar, but a new concave bottom means the jar only holds 7 ounces. A tortilla package that reads “Now New With 10 in a Package!” is the same price as the old 12-pack.
A box of baby wipes that used to contain 80 wipes now has 72. Sugar comes in 4-pound bags, not 5-pound. Sixteen-ounce cans of vegetables now come in as little as 11 ounces—for the same price.
The New York Times reported the story of Lisa Stauber of Houston, who used to feed her nine children with three boxes of pasta. When the three boxes came up short one night, she checked the box to find that the old 16 ounce-sized box of pasta now contained only 13.25 ounces, but she was still charged the price for 16 ounces.
Chicken of the Sea tuna now comes in a 5-ounce can and often costs more than the old 6-ounce size. Bags of Doritos, Fritos, and Tostitos now contain 20% less than in 2009.
Food companies are repackaging to mask food inflation
As reported in the the New York Times, Kraft is introducing “Fresh Stacks” packages for its Nabisco Premium saltines and Honey Maid graham crackers. The new packages have 15% fewer crackers at the same price as the old packages but have the benefit of “portability” and “added freshness,” according to a company spokesman.
Procter & Gamble has “Future Friendly” products it promotes as using 15% less water and energy. Probably because the packages are 15% smaller.
Many food packages now advertise “fewer calories.” The claim is true because there are fewer calories in a package when there is less food.
Food inflation, like all inflation, is driven by the government printing money beyond the value of the economy. The Federal Reserve is, as we speak, drawing dollars out of thin air to “buy” the debt from the U.S. Treasury, a classic move that will make every dollar in existing circulation (or in your savings account) worth less.
Food prices have also been driven up by a worldwide increase in the demand for better food. As demand has risen, environmental regulations from the “Green Revolution” have restricted the growth of the food supply. Higher demand but lower supply = higher prices.
There’s another reason supply is tightening and food prices are skyrocketing.
Obama has insisted on raising the amount of ethanol from corn that must be used in our gas tanks. The diversion of up to 40% of the U.S. corn crop to ethanol has doubled the corn price in the last two years. Corn and corn products such as fructose drive the prices of everything from cereal to beef to anything with a sweetener.
Intended or not, evil consequences flow from diverting food to our gas tanks.
To many Americans, food price increases are an annoyance. To billions of people around the world dependent on the productivity of the American farmer, these food price increases spell disaster. The Tunisian riots were sparked by a food-price protest. The riots continued until the Tunisian dictator was driven from the country and the rest of the Middle East was engulfed in the same rioting.
Even after the consequences of ethanol production have become known, Obama is not done manipulating food.
Congress has passed the latest “food safety” law at Obama’s request. Who isn’t for food safety? But this law is about far more than safety. The law gives the federal government the authority to define what “food” is, to license food growers, handlers, processors, truckers, etc. Even backyard gardens and farmers’ markets could be regulated by the feds under this law.
Once the feds take over food production through regulation and definition, do you think prices will go down and choice up? Just the opposite will happen. When I was a kid, a Russian from the old Soviet Union visiting the U.S. would head first to the supermarket to gaze in wonderment at the cornucopia of abundance there. Why would we want a government-run food system here?
I suppose that’s the same question asked about health care. Seems like there’s a pattern here.