As Thanksgiving 2024 is upon us, it is only fitting that I take a moment to remind everyone (including myself) that this nation’s first Thanksgiving was about thanking God for the opportunity to take care of his creation and be able to feed themselves through tough times. I thought today though I would take a look at the last 100 years in food production instead of the first 100.
All of us in farming have, at some point in time, bragged about how little the U.S. consumer pays for food as a percentage of their disposable income. Today, I am asking myself why have we in the business of growing food have decided that was a good idea.
All of sudden the talking heads, particularly through the campaign season, have enjoyed spouting off about “food inflation” and who is responsible. Guess which political party history tells us is not the problem: none of them! But I am here today to address the severity of “the problem.”
It is easy to find this from a government report.
The average price of food in the United States rose by 2.1% in the 12 months ending in October, after posting an annual increase of 2.3% in September, according to the latest inflation data published November 13, 2024, by the U.S. Labor Department’s Bureau of Labor Statistics (BLS). As recently as August 2022, the rate of inflation for food at 11.4% was the highest since May 1979.
But let’s get real for a moment and look at what is really happening. I thought it might be interesting to go back in history to compare two different eras of food costs to the American public.
1934 is regarded as the highest year in terms of percent of disposable income that food cost for U.S. consumers at 25%. So let’s take a glance at what food cost that year:
- Fresh eggs (1 dozen): $0.33 ($6.41 in today's dollars)
- White bread (1 pound): $0.08 ($1.55 in today's dollars)
- Sliced bacon (1 pound): $0.29 ($5.63 in today's dollars)
- Round steak (1 pound): $0.28 ($5.44 in today's dollars)
- Potatoes (10 pounds): $0.23 ($4.47 in today's dollars)
- Fresh delivered milk (1/2 gallon): $0.22 ($4.27 in today's dollars)
Government reports looked like this as the time:
Coming off a stock market crash the previous year, the nation was plagued by economic peril. By March 1930, more than 3.2 million people were unemployed. In an effort to protect American businesses and farmers, President Herbert Hoover signed the Smoot-Hawley Tariff Act, which raised taxes on imports. Foreign governments contested the legislation, leading to a decrease in foreign trade and weakening of the foreign economy. Hurting the American economy even further was a banking panic—a loss of confidence in the security of banks, resulting in people withdrawing their money in large numbers.
For personal interest, I thought I would compare that to the year I was born, 1966:
- Fresh eggs (1 dozen): $0.60 ($4.82 in today’s dollars)
- White bread (1 pound): $0.22 ($1.77 in today’s dollars)
- Sliced bacon (1 pound): $0.95 ($7.63 in today’s dollars)
- Round steak (1 pound): $1.11 ($8.92 in today’s dollars)
- Potatoes (10 pounds): $0.75 ($6.03 in today’s dollars)
- Fresh delivered milk (1/2 gallon): $0.56 ($4.50 in today’s dollars)
If you compare what food cost in 1934, 1966 and today, I am going to tell you that “food inflation” is political rhetoric. The truth of the matter is that “Cheap Food Policy” would have been better named the “Cheat Farmers Profit.” It is being reported right now that by mid-2025, our agricultural trade deficit will be at $45 billion. That is because the global food companies can import food cheaper than we can grow it here. We, the farming public, have been content to sit back and allow others to shape policies that enable this. While farmers are going out of business right and left, the consumer is in the grocery store this week buying turkeys for $.97/lb. and thinking it is wonderful.
The problem we should be focused on and the very reason I started writing this column 23 years ago is that we need a hard reminder that domestic food and fuel are a means of national security. Our security erodes every day that we, as taxpayers, pay another farmer to quit growing food through our government programs. And for the consumers out that care, you should know that this is happening at the most rapid rate in our nation’s history. One final giblet, the debt clock says you owe the federal government $106, 664 at the time of this writing.