Food costs are a blessing we just cannot ignore

by KEN MOORE

   Right now, the average American consumer spends less on food than anyone else does in the world!
   We're paying about 10.2 percent now?and it's going to get better. Before long, each of us probably will spend under 10 percent of our disposable income for our food.
   It stands to reason that as our economy continues to prosper and standard of living increases, food costs will gradually increase. Indeed, they have over the years.
   However, our "buck" is feeding us better today than it ever has before. In fact, every year since the end of the Great Depression, food prices relative to the average American's earning power and national economy have decreased, or at least been stable.
   This is confirmed every year in Arkansas and American Farm Bureaus' Marketbasket and Thanksgiving Dinner Cost surveys conducted just prior to Thanksgiving since 1986. Farm Bureau shoppers across the country survey the average prices of the ingredients of the traditional holiday meal for 10 (which includes an "average" family of four, plus six more relatives or guests).
   In our state, members of the organization's Women's Committee in November found that the meal cost an average of $25.00. Nationally, that figure was $35.04.
   Putting these prices in perspective, a family of 10 may enjoy the holiday feast for between $3-$4 each‹if shoppers take advantage of advertised specials and the "best price" rather than name brands.
   Go back 12 years. The average cost of the meal here in Arkansas then was $20.88. While it's evident food prices have risen, increases have not been dramatic.
   Generally, the survey averages held in the $20?$23 range from 1989 to '93. However, in '97 they jumped to just under $28 and have fluctuated between $28 and $30 until last year. The key factor in the survey is the average price of a 16-pound tom turkey, which in 2001 was 53 cents per pound, down from 61 cents the year before. Turkey prices in Arkansas have historically been 30-40 cents per pound cheaper than the national average.
   Efficiency is key
   The chief reason we can enjoy such inexpensive food is the efficiency of our American food-production system.
   "American farmers are the most efficient in the world," says Gene Martin. "They have to be in order to survive in today's highly competitive market." As chief market analyst with Arkansas Farm Bureau, Martin knows that a lot of factors account for that efficiency and work to keep the lid on food costs.
   "Farmers who aren't efficient aren't farming anymore.
   "Over time, they must utilize the latest technology and research to stay in operation."
   Supply and demand, a basic of economics, is also a factor.
   Joe Miller, an economist with American Farm Bureau Federation, says an over-abundance of a product, in this case turkey, and the farmer's ability to create such large supplies of fresh produce help prevent any large spikes in food costs.
   "We are seeing a fairly large supply of pretty much every commodity right now," he says. "From cranberries to turkeys to grains, almost all have low prices‹and this is reflected at the retail level."
   Miller was primarily talking about holiday supplies, but the condition is fairly constant year-around.
   Over the past four years, producers have dealt with 30-year lows in what they receive for their crops. Their effect, though, is just now starting to reach the supermarket.
   The role our land-grant colleges and universities play is one of the big reasons the productivities of U.S. and foreign agricultures are so far apart.
   "Through the farmer-funded checkoff and promotion programs," Martin says,"they're investing a portion of their proceeds into research projects that'll allow them to increase production of food, while remaining as efficient as possible.
   "For example, in applying crop protection products they're able to know what the latest products are, and if they can use less than the amounts recommended by the chemical companies; thereby protecting the environment and saving money."
   As consumers, the rest of us benefit from farmers' ability to harness many skills successfully. It's long been said the American farmer must be a hybrid professional of sorts: an agronomist, engineer, mechanic, accountant and business manager, all rolled into one.
   World's best infrastructure
   In addition to research, another thing that sets the American food system apart from the rest of the world is that we can move food from the farm to supermarket shelves quickly and efficiently. For several years now, satellites orbiting the earth have been tracking movement of food products from processor to retail outlet. This has dramatically enhanced our distribution system efficiency.
   "We have the world's best infrastructure, no question," says Martin. "Our ability to move grain and other food products by river, rail or over our interstate highways is truly an advantage American consumers enjoy that those in other parts of the world do not.
   "All you have to do is travel abroad and check out food prices and how plentiful food is in other countries to appreciate how fortunate we are here in the United States."
   This isn't to say the average shopper doesn't spend several hundred dollars a month at the grocery store. That depends on individual and family eating habits‹or how avid a bargain hunter one might be.
   Competition between supermarket chains and the ability of smaller, locally owned stores to attract loyal customers also have resulted in fairly stable and "reasonable" food costs.
   However, Martin says that sharp rises in fuel prices in late 2000 were passed on to consumers in the form of slightly higher food costs. Those fuel prices have since stablilized and fallen back a bit, but remain a factor in what we pay for food.
   "These higher fuel prices impact every segment. From the farmer's cost to operate his equipment to the cost of moving food products from the processor to the store, transportation is involved.
   "Higher prices are being felt at the wholesale and retail level."
   American farmers can produce food crops and livestock efficiently in large quantities. So, despite the small, temporary, fuel-cost fueled rise in food costs, Americans should never again have to experience Depression-era-like food lines or empty store shelves. That's not the case in much of the rest of the world.
   So next time you see a farmer, offer a word of thanks. His ability to produce such an abundance of healthful food, at prices practically every American can afford, is a blessing none of us should take for granted.
   

Ken Moore is contributing editor to Front Porch and coordinator of news service in Public Relations, Arkansas Farm Bureau Federation.