July 8, 2006 - How Fair is This?

How fair is this? The price 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, the price of another critical source of energy that is even more important for all of us because it sustains life for you and me is actually moving lower. I’m talking about food.

That was proven again by the quarterly survey of retail food prices conducted by the American Farm Bureau Federation; it’s called the “market basket survey". The informal survey showed the 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, 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 $3.51 a pound. We saw sirloin tip roasts drop 11 cents a pound; whole milk dropped 12 cents a gallon to a national average price of $3.04; ground chuck dropped 18 cents a pound.

Terry Francl, who is AFBF Senior Economist, said “going back to the mid 1970's, farmers received an average of one-third of consumer retail food expenditures. 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 just $8.78." Meanwhile the price of the other energy we need to produce the food continued to soar with one economist predicting the price of oil will move to $100.00 a barrel by the end of the year.

I wonder what would happen if the price of food matched the increase in the price of oil. I’m willing to bet there would be massive protests across the country and Congress would be forced to take action against farmers and ranchers to force the price of food back to their definition of “reasonable prices". Yet, while we verbally complain about high fuel prices, we just keep on driving, as was proven over the 4th of July holiday.

At most, invocations before a meal or our table prayers at home, you hear the words “bless the hands that prepared the food" In light of what farmers and ranchers 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.