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food_price (12K)Food Prices Remain High

Though oil and commodity prices have dropped over the past 6 months, food prices remain high. And while all the attention of corporate greed is focused on bankers and Wall Street, other corporate pirates are continuing to gouge the people on the sly.

Food prices rose over the past couple of years because manufacturers and grocery chains complained of high cost of transportation, so they had to increase prices on shelf food. But now that the price of oil is down and the transportation crisis has waned, why have not grocery store prices gone back down?

Because manufacturers and grocery stores have found a way to bilk the consumer while all the attention is on the big boys. But of course, blame is placed on everyone except those responsible. "Supermarkets complain that giant food manufacturers' wholesale prices have risen even as commodity costs have fallen."

The concept is all too simple in a greed-torn society. When hard times come, charge more money for everything and blame the next guy and the invisible hand of the free market, but when prices go down, the people become so relieved they go on to forget the other problems and soon accept everything else as normal. While some industries reaps the profits, the consumer continually struggle.

Not only do some industries find ways to milk the people by keeping prices high, but they even skimp on the goods by decreasing quantity, and that is a shame. For instance, "Kraft raised the wholesale price of a box of its staple macaroni and cheese an average of 9% in the last year, according to several supermarket chains, despite 38% to 68% plunges in cheese and wheat prices. These increases factor in the growing practice by the manufacturers of shrinking the weight of the contents without reducing wholesale prices."

So not only have the manufacturers gotten over on profits, but maintains larger inventory as well. And in a supply and demand system, the higher inventory you have, the higher you can charge when it is in demand.

"It's disingenuous to consumers that all commodity costs are coming down, interest rates are coming down, everything is coming down, and [the national brands] are taking their prices up," Steven Burd, chief executive of Vons owner Safeway Inc., told investors.

When families head to the grocery stores to get food for their families, grocery bills are as high as they were two years ago at the peak of the oil crises. The average grocery bill increased from around $400 to $625 a month, and is now averaging around $550 a month, despite the drop in everything else. So who is getting over and who is hurting?

The news media have not brought this issue to the attention of the public or politicians because they are more focused on the bigger corporations, and certainly no politicians have addressed the problem, so we can assume that the reason is that food manufacturers' have a stake in the game somewhere along the political line.

"It is only recently that we have seen some price decreases for certain commodities, such as milk, butter, wheat, corn, soybeans and edible and mineral oils, but most of these still remain above historical averages," said Dean Mastrojohn, spokesman for Unilever U.S. "We also see prices for certain commodities that we use, such as beef extract, tomatoes and tea, continuing to increase."

So not only have prices not decreased, but some are even continuing to increase. Of course spokespersons will claim some free market economic formula to justify why prices are still high and how they are caught in the middle and cannot reduce prices for the consumer just yet, but who among us have not looked between the lines for what situations like this really say. That companies bilk the public every chance they get.

Countries around the world are suffering food shortages. People are dying, children are starving, cities and towns are in shortage and America and global business people are playing the same games of monopoly in order to get rich and send their kids to college, so they too, can learn the trades of greed, indifference, and secret wealth.

So once again we see the practices of free market capitalism working as an underground cartel.

Sources:
http://www.latimes.com/business/la-fi-foodprices2-2009mar02,0,4734731.story?page=1

© May 2009 by CR Hamilton || [TOP]


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