July 3, 2006 - The Uneven Cost of Energy

How fair is this? The cost of the energy we need to get from one place to another, basically oil, continues to move higher, with record high prices and record high profits for the oil companies. Meanwhile, another critical source of energy that sustains life for you and me, food, their prices are actually moving lower.

That has been proven again by the quarterly survey of retail food prices conducted by the American Farm Bureau Federation. They call it their “market basket survey". The informal survey showed that the total cost of sixteen basic grocery items in the second quarter of this year, stood at $31.91. That is down 1 ½%, or 60cents from a year ago. The surveyed items dropped 82 cents in the second quarter of this year, following an increase of $1.90 in the first quarter. 

Of the 16 items in that sample “market basket", eleven dropped in price, four moved higher, and one remained the same. Cheddar Cheese showed the largest decrease, down 38 cents, down to $1.51 a pound. But we saw sirloin tip roasts drop 11 cents a pound; whole milk dropped 12 cents a gallon; ground chuck dropped 18 cents a pound. Meanwhile the price of the other energy we need continued to soar.

Terry Francel, who is AFBF Senior Economist, said “going back to the mid 1970's, farmers received an average of 1/3rd of consumer retail food costs. That figure has dropped steadily over time, and is now just 22% according to USDA statistics. And if you use that percentage across the board, and this is a critical number, the farmer’s share of the second quarter’s $31.91 market basket total would be $8.78. And yet, the price of the energy to produce that food continues to soar."

At most, invocations before a meal or table prayers, you hear the words “bless the hands that prepared the food" In light of what farmers continue to do for our way of life, I think we should also add “bless the hands that produced it."

My thoughts on Samuelson Sez.