In the current situation of ever soring gas prices, many people are looking for a solution to wean our country off of our gluttonous appetite for foreign oil. One of the solutions over recent years has been the use of Ethanol to moderate prices at the pump. One of the issues that are often brought to the attention of many in regards to the use of Ethanol is the effect it has on food prices. Opponents of the wide use of Ethanol in our fuel supply blame the rise of food costs directly on this attempt to go green. But with food companies showing record profits over the last several years is this truly the case, or is “Big Food” using the lack of education on the issue to blacken their ledger entries.
One of the blogs that I found that gives an interesting perspective on the issue of “food vs. fuel,” can be found at http://ethanol.typepad.com/. This blog has posts from various members of the American Coalition for Ethanol. The blog is designed in a clean, easy to read format that puts more emphasis on the content, as opposed to the overall look of the website. Although attractively designed blogs can be appealing, many of these sites are not user friendly, and make navigating them for information a challenge.
One of the posts that I found to be most intriguing was posted by: Ron Lamberty, Vice President / Market Development, American Coalition for Ethanol, and titled, “Big Food's (very profitable) blame game.” Lamberty points out some basic, yet widely unknown facts in regards to the food industry. How is it possible to have such a crisis in speaking of corn production, yet have industry related companies showing record profits? When reading over this entry I could not help but think of the record profits that were posted by our countries leading oil companies in the midst of an oil crisis. It is fairly obvious that “Big Oil,” took advantage of the perceived shortage of petroleum in order to boost their profits. Is it possible that “Big Food” is doing the same?
I often ask myself why the food industry is not subject to regulation when it comes to pricing. Take electricity for instance. It is regulated by the federal government because it is considered a basic necessity, is not food the same? We can all remember the effects of deregulating essential markets (such as electricity and natural gas), can have. Enron was at the forefront of deregulating natural gas, soon to be followed by electricity. The effects of this were rolling black-outs in California, followed by a spike in electrical costs. A deregulated market can be quite expensive for the consumer.
Would price control on essential food groups damage the free marketplace? This is a reasonable question to ask. I believe that with an adjustment in marketing, “Big Food,” could maintain its profitability. Marc Rauch from “theautochannel.com,” points out in his response to a Washington Post article “How biofuels contribute to the food crisis,” that the actual cost of food is minuscule compared to the packaging that it is sold in. Food companies could go a long way in reducing the cost of their product if they focused on the quality, as opposed to the elaborate packaging in which it was sold. Maybe cost regulation would force them to refocus their efforts. Unlike the option of driving less to reduce the cost an individual will spend in a month on fuel, cutting back on food consumption is not a realistic option. In most cases, families will choose to purchase less expensive food items that are loaded with empty calories, and have a lack of nutritional value. This certainly contributes to the overall decline in health of our nation, while adding to the ongoing problem of childhood obesity. These effects can and will have devastating consequences on the cost of healthcare in the future.
With the economic situation that we are facing as a nation currently, meditating on some of the information providing in this blog might help us better understand the actual reasons for the rise of food cost.
Works Cited
Great post! I think we all should consider how the effects of money are going to effect our daily life. The big businesses are going to soon enough control our everyday life. We have become so dependent on electricity and other things to make our everyday life run that we might not know how to cope without those things. A few friends and I were just discussing the other day how people were going to have to quit their jobs because they couldn't afford to drive to work if fuel prices went up to $6.00. Can we consider that we might have to give up jobs simply because we aren't willing to give up our gas guzzling vehicles? I think its absurd, but many people are not willing to give up those vehicles. It is also important to consider that people wouldn't know how to live without the grocery stores providing all of their sources of food. We have become dependent on someone providing our food. It might be important to teach kids in school how to grow a plant and how that process works. Simply balancing a checkbook and how to drive to the store might not be all they need to know anymore. I really enjoyed reading your post. Thanks for a great session!
ReplyDeleteI enjoyed reading your blog about “Big Food” as it definitely hits home right now with the food and fuel prices rising. I think that the Big Food companies have driven the little farmer out of business just like “Big Oil” has done and this is part to blame for higher food prices too. The Big Food and Big Oil companies can charge more for their products because there is less competition. Also, what Big Food companies forget to mention is that one thing which helps to drive up the cost of our food supplies is government subsidies. These subsidies pay Big Food companies millions of dollars to NOT grow corn, peanuts, wheat, etc. to keep the price up! All of the rising food prices cannot or should not be blamed on higher fuel prices alone.
ReplyDeleteAnother thing mentioned in this article was how Big Food has shiny new mega-stores and how the elaborate packaging contributes to higher prices on healthy food, which we as consumers tend to forget about. If we can train our brains to ignore the fancy stores and fancy containers, we can maybe get the point across to Big Food companies that we are smarter than that and we want and demand cheaper products that are healthy too!
If we can do this with food, maybe as U.S. consumers, we can learn to do this with the vehicles we drive. We all love our big SUV’s, our fuel guzzling monster trucks, our thirsty V-8 engines that run fast but drink fuel faster than we can make it to the gas stations, but it is time we re-train our brains on fuel consumption too! The U.S. consumption of fossil fuels is among the largest on earth and we need to use less fuel so that we will stop being puppets of the Big Oil companies and Foreign Oil markets. If buying smaller, more fuel efficient vehicles drives consumption and eventually the price of oil down, then consumers have definitely won on both counts of lower food and fuel prices.