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Who are you going to believe, a recent wonk report that says the third straight year of California drought won’t have much impact on food prices? Or your own grocery bill?
Make that two droughts, one here and another in the Midwest affecting the price of beef. Throughout the Plains states, ranchers have been slaughtering their starving cattle. Add to that a virus that so far has killed 7 million baby pigs, causing the price of bacon to spike 32 percent since 2008 with more than half that occurring in a surge the last two years.
If there were any good news to report, it’s that bacon finally costs enough to stop chefs from putting it in my dessert.
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Eating dessert out may not be an option as prices continue to rise. Yet, buried in a report called the Economic Analysis of the 2014 Drought for California Agriculture from the UC Davis Center for Watershed Sciences is a prediction for relatively small drought-related price increases.
“My analysis is from a California perspective,” Richard Howitt, the report’s author told me. “Certainly there are exceptions. If we have another dry year, which is in the cards, then we’ll see more of an impact. That’s the way the computer sees it.”
That’s not the way we see it now.
“Already there’s a 10 to 20 percent price increase for stone fruit,” says Joany Titherington of the Oak Park Farmers Market. “There is no magic pill for this,” she said about how to mitigate the sticker shock. But there is the “Word of the Week.” Find it revealed on the Oak Park Farmers Market Facebook page and go to Titherington’s booth at the market on Saturday. Tell her the word and get $5 in coupons to spend on food.
Dave Kranz of the California Farm Bureau finds the low-ball price prediction a head-scratcher, too. “You would think that with fewer acres planted and the economy improving, supplies would be down and demand would rise, leading to higher prices,” he said, adding that supply and demand are just two of the factors in the formula that creates the price people pay for produce.
Regardless of the cause or whether you’re buying food from California, it’s easy to prove that prices are going up everywhere. It may not have occurred to you to pull up Table 25 of the Historical Consumer Price Index for All Urban Consumers from the U.S. Bureau of Labor Statistics. I did, and I can tell you whether the price of just about anything, from 2006 compared to May 2014, has gone up or down.
Dairy products are up 15 percent and eggs are up 14 percent since 2010. Uncooked ground beef is up 10 percent and oranges are up 19 percent in two years. At $6.99 a pound, hamburger might as well be yesterday’s T-bone – a luxury. Replace hamburger with cheaper protein from lentils? Oops, lentils are up 15 percent since 2010.
Even Hershey’s is raising the price of all its chocolate bars.
Overall, the cost of food eaten at home went up 10 percent in four years. If you haven’t gotten a 10 percent raise, then a bigger percentage of your income is being spent on food.
When faced with previous food crises, American ingenuity came through. A World War I recipe for “war cake” used bacon grease instead of butter. “Depression cake” used molasses instead of refined sugar, rendered chicken fat instead of butter and no eggs. World War II’s eggless, butterless, milkless cake replaced oil and eggs with mayonnaise.
What’s common to all these little helps was national coping, like growing a “victory garden.” In the 1970s, the Arab oil embargo gave us many price-busting strategies. We saw the rise of no-name generics, like the can with a white label and black letters that said “beer.” Utopians set up co-ops and taught the rest of the country to buy in bulk. Customers could bag their own groceries if it meant saving pennies, and we did. Hamburger got a Helper … and I didn’t.
“A lot of people have to make hard decisions, especially the people who are really affected by food prices,” said Kristen Kiesel of Sacramento State’s economics department. In a badly timed vote last year, Congress cut food stamps. That’s a double whammy in that eligible Californians will receive fewer CalFresh dollars, and what they do get will buy less food.
To gauge if you’re overspending the household budget, a family with two adults and two kids in elementary school ought to spend $205.90 a week on food, according to the USDA’s official moderate food plan. Making trade-offs could be difficult for families that strive to eat vitamin-rich fresh produce. If your choice for health is organic, you’re about to be gob-smacked by the cost incline.
“Organics can be 10, 20, 50 percent more expensive than conventionally grown,” said Christine Bruhn, consumer behavior specialist emeritus at UC Davis.
If the day comes when you can no longer afford organic products, try sneaking a bunch of conventional broccoli into your cart instead of organic – and don’t tell your friends.
This is fine with Kiesel. “It’s more important to have the fresh fruit and vegetables than to have them organic,” she said. The trade-off here is that pesticide residue has been found to be four times higher on conventional crops.
In April, the USDA Economic Research Service revised its 2014 price forecast upward for fresh fruit and vegetables. Be prepared not only for prices to outpace inflation, but for inflation to outpace our ability to deal with it. Then, wait.
“California has survived price increases in the past,” said Ron Fong, CEO of the California Grocers Association, who grew up working in his father’s grocery store in Sacramento. What California has not faced, Fong said, is severe drought for more than three consecutive years. He understands the consumer inclination to find the cheapest price precisely when prices run high.
“We’re living in a world of cheap now, and that makes total sense,” Fong said. “You’ve got a family to feed. You’ve got to put food on the table. We all have to adjust.”
How you make those adjustments is up to you.