Thursday, April 24, 2008
Catherine Wilson, Bureau Chief
The Coming Food Crisis
Robbing Peter To Pay Paul
If you feel lately that your wallet is hurting at the supermarket, you’re not alone. According to the United States Department of Agriculture
(USDA), food prices in the United States rose 4% in 2007, compared with an average 2.5%, per year, for the last 15 years. The USDA expects increases in 2008 to be far greater. The latest Consumer Price Index (CPI), issued in April shows expected increases in food prices for this year to be another 4.8%.
The dramatic increases in food prices, globally, are creating food shortages and causing riots worldwide. The Guardian investigated what is behind this mounting crisis. The reasons for these increases go far beyond global warming, changing weather patterns, and energy costs. For the past 25 years, the United States Department of Agriculture encouraged conservation by farmers to limit production of certain crops to stabilize food prices. Under the Conservation Reserve Program, farmers could earn more by not planting certain crops, and the government could keep the prices of those crops stable.
However, in recent years, the snack food and energy industries have been upsetting this delicate balance. A coalition of ethanol, baking, snack foods and other industry groups are now offering incentives to farmers to grow the desired crops for their industries. Crops such as soybeans, wheat, and corn are now in big demand for uses other than for domestic food consumption. These new markets have pushed up prices. The USDA incentives cannot compete with the industry payments, overriding the federal government’s longstanding methods of controlling the costs of our nation’s food supply. In addition, the demand for corn, specifically, in recent years to produce ethanol has swayed farmers away from other staples, such as wheat and soybeans. Thus, the rising costs of these staple crops are having a domino
effect across the farm industry itself as higher soybean prices mean higher feed costs for farm animals. The demand for ethanol has increased the cost of corn, ironically increasing the cost of energy for the production and transportation of crops. And, the high wheat costs are affecting our local bakeries and even our pizza shops.
Michael DiNardo, owner of Silvio’s restaurant in Thornwood, told The Guardian that his food costs have increased an average of 50% in the last year alone. “That’s an average increase”, DiNardo stressed. “Some items, such as dairy and fowl, have increased by as much as 200% over last year’s prices. Our tomato distributors have already warned me to expect another 50% increase, and our wheat distributors are warning me of a major wheat shortage come summer. That’s my livelihood – we can’t make pizza without flour,” DiNardo added.
Rising costs of ingredients are nothing new to the restaurant industry. DiNardo noted that he has usually been able to absorb temporary increases before. “Usually prices increase for a period, like the summer, but then come back down. We try to absorb a temporary increase where we can, but this is looking like it’s here for the long-term.”
With a long-term problem, the increase cannot be absorbed by restaurants and have to be passed along to consumers. “I’ve already had to raise my prices 2½ - 3½%, and I just did a major price increase about a month ago,” Di-Nardo said. “When I raised my prices, I was very upset. I live in the community and I see my customers every day.”
The rising costs have also placed greater emphasis on items that were once an after-thought. “Mozzarella used to be the most expensive item I purchased,” Di-Nardo noted. “But lately, wheat is almost as expensive. It used to only increase a penny or two at a time. But now it’s competing with mozzarella as the most expensive ingredient”.
Local supermarkets are also feeling the pinch of rising prices. Stew Leonard, Jr., President of Stew Leonard’s Supermarkets, spoke to The Guardian about how they are dealing with this issue. “We buy from local farmers so we speak to them on a constant basis. Our dairy farmer has over 3,000 cows on his farm. The cost to heat his barn for those cows has doubled in the last year. It cost him $1.50 a day to feed a cow in 2007, it now costs him $3.00. Since we deal with small local farmers, if they tell me they have to increase their price to me, I don’t want to
say no because that could but them out of business. But if we raise prices, sales drop. So we try to wait as long as we can while still being fair to our farmers. The idea for us is to respect our suppliers and to get the best quality for our customers. But our farmers can’t do that if they’re hurting financially. So we work with them to find solutions.”
Farm costs are not the only increases affecting our local supermarkets. Rising energy costs are taking a toll as well. According to Stew Leonard, rising energy costs are impacting the transportation of the products he is purchasing. It is also affecting non-farm products. Leonard told us, “I spoke to our fishing boat and he told me that it cost him $500 to fill up his tank 2½ years ago. Now it costs him $1,000 to fill the same tank to go out”.
Leonard’s solution is to work directly with his farmers, fishermen, and suppliers. “We try to work with our suppliers and give everybody the best bang for their buck. In an economy like the one we have, you have to keep your prices sharp”. Leonard notes that not every item on their shelves is affected by the food shortages and energy costs. Some items are actually doing well. “The high Euro is making wines more expensive, but other countries, including the United States, are looking at this as an opportunity to gain market share. So they are lowering their prices to compete. We are seeing the same trend with cheese. Plus, as food costs increase, and going out to dinner becomes more expensive, people eat at home more. So supermarket sales actually increase. We are already getting more requests for recipes. And interestingly, we are also seeing an increase in wine sales,” Leonard noted.
The rising cost of food is not only affecting our local restaurants and supermarkets, but it is also placing hundreds of thousands of county residents at risk. Christina Rohatynskyj, the Executive Director of Food Patch, told The Guardian that they have been seeing the impact of rising food costs first-hand. “We purchase a lot of food for distribution, so we see the changes in costs. Plus, many of our food pantries, and soup kitchens, and other organizations, are telling us that they are seeing more people come in for help. They tell us if they had more resources, they could give out more food because the demand is there. If our economy worsens, there are going to be more people who will need help to stretch their food dollars.”
The number of county residents who are already hungry or at risk of being hungry is dramatic. Rohatynskyj estimates that “there are approximately 200,000 people in this county who are hungry or at risk of being hungry – that’s one out of every five residents! According
to the 2006 Census, the median income in Westchester County was about $71,800. That means about 450,000 people, or half of our total population, fall below this income level. An average family of four or five cannot live in Westchester County on an income of $71,800, let alone less than that”.
The statistics of who the hungry in our midst are is equally dramatic. “Thirty-six percent of those who are hungry in Westchester County
are children under the age of 18” Rohatynskyj noted. “Almost 30% of our residents over the age of 50 fall into this risk area, along with 15%
of our seniors over 65. Over 83% of the individuals who come to us for help are United States citizens and only 5% are homeless. Most of the individuals we serve, about 50%, are the working poor. They have a job, but cannot afford to feed their families. For many people in our
area, they have to choose every day between paying rent, prescriptions or buying food”.
According to the United Nations Food and Agriculture Organization, increasing food prices, coupled with food shortages, are placing a strain
on already impoverished nations around the world. The President of the World Bank, Robert Zoellick, announced in mid-April that 33
nations are already at risk of social unrest because of the rising prices of food. In the United States, most households spend less than 16% of
their budget on food. But in developing nations, that number is closer to 50% or even 75% (Nigeria) of their income.
The World Bank has noted that the doubling of food prices in the past two years could push 100 million people into poverty. The United
Nations attributes this increase to poor weather for crops in many countries, increased demand by growing populations, and a substitution
of growing crops for food staples for the production of alternative fuels instead. Riots over the shortages of food in several impoverished
countries this month have already led to deaths leading President Bush to release $200 million in emergency aid last week.
The demand for alternative fuels led to the production of ethanol which siphoned away the corn production in our country and globally. Ironically, the solution for one of our nation’s problems has resulted in the creation of a greater problem in our midst. One short-term solution to the food crisis would be to increase production locally. Dr. Susan Rubin, founder of the Better School Food organization (profiled
by The Guardian in 2007), advocates a return to backyard gardens. “Not only will the food be healthier, but gardening has therapeutic
values – it helps relieve stress. Plus, it is a better environmental use of our land than drowning it in pesticides to keep our lawns weed-free,”
Dr. Rubin notes.
Westchester County government is even offering several workshops in April and May at Hilltop Hanover Farm in Yorktown Heights to assist local resi-dents in composting a backyard organic farm and other topics. In the meantime, middle class residents, however, are still faced with paying for their weekly grocery shopping bills.
Even limiting purchases to mere food basics, without adding cleaning supplies or toiletries or snacks, can mean a minimum $150 weekly bill for a family of four. Now that soda is far cheaper than milk, local families are already making unhealthy choices to keep their food costs down.The immediate impact of rising food costs is already evident with the food riots and the sticker shock at our supermarkets. But the long-term impact could be even greater. The threat to our health and our national security has yet to be acknowledged.
Northern Westchester Round-Up
Bedford: A Connecticut woman, Melanie Martinez, was arrested for driving over 100 miles per hour on Interstate 684 in Bedford. State troopers arrested Martinez for drunk driving and she is scheduled to appear in Bedford town court on May 1.
Buchanan: Indian Point cancelled their tests of the emergency sirens a day early last week after only two days of testing. Officials at Indian Point claimed they received all the data they needed from their tests within the two days.
White Plains: Pace University held public hearings regarding pay raises for the Westchester County Board of Legislators. The board has doubled its operating budget in the last five years.
Yorktown: Scoot Baia was charged in town court with telephoning in a bomb threat to the Yorktown High School. The school was evacuated as a result of this threat, which was traced to a local phone. Baia has been released on bail pending a hearing.