It’s Only a Gallon. The True Cost of Food. By
Supply and Demand, right? That’s what drives prices? It would seem to make sense that supply and demand drives the price of your groceries, just like everything else. But the true cost of your food is calculated in ways that you could never have imagined.
It would seem that nature would play a large part in the cost of food. A drought, a plague of locusts, or other natural calamity can wipe out a crop and drive up prices. That certainly happened last year, when wildfires in Russia wiped out millions of acres of wheat. Much of Europe then looked at countries like us for the grains that they needed, and a modest price spike occurred.
The real price hike, however, happened when commodity speculators sought to take advantage of this. They began to trade crop futures like little boys with baseball cards, and each trader sought to cash in on the hope that wheat would become like gold. For a while, it almost did.
Another factor in the price of food is the cost of oil. Farmers need fuel for their tractors, and since not everyone lives on a farm, we often have to transfer their crops great distances to get them on our tables. We have a somewhat unique conundrum in the United States, as we subsidize corn grown for bio-fuels. While it is better for the environment than regular old gasoline, the federal money for ethanol crops leads many growers to reap for the gas tank first, and the breadbasket second. As the cost of gas goes up, so does the cost of corn.
This high cost of corn also impacts the cost of meat. Contrary to what statistics are telling us right now, people make more money now than ever before, and as a result are more inclined to dig into a t-bone. As we become wealthier, more and more of us have access to and an appetite for meat. Acting contrary to nature, we feed our animals a whole lot of corn, and as that cost goes up, so does the cost of your steak.
A couple of years ago, we all became anxious when gas went over $4 per gallon. Do you know what else went over $4 per gallon? Milk. Does a body good, but won’t get your SUV to the store and back. Much like meat, this cost was also directly related to the cost of fuel. Between 2006 and 2007, at the height of our fuel crunch, the amount of corn grown to produce ethanol increased 52 percent.
That’s over half in a single year, and keep in mind that in 2007 it was almost 4 billion bushels of corn.
There is a husband and wife team who recently released a book, The Locavore’s Dilemma: In Praise of the 10,000-Mile Diet. While we preach about local food, and still try to maintain a pretty steady diet of foods from right around Richmond, they do make some good arguments that going strictly local is a boneheaded idea.
What do we do when it’s wintertime? What if you live in an area like New York City? Will people in Toronto never again taste a strawberry?
They did some research and found that when people jumped into a local food diet they generally didn’t fare very well. Going local was often the result of things like war, and not having access to transportation for food often lead to millions of people starving. One of the good things about our great carbon-soaked blue marble is that when there is a raging prairie fire in the wheat belt of Russia, they can count on friends like us and the Chinese to send them grain to make bread. It’s like the Red Cross sending hot meals to a tornado-stricken town, but on a much larger global scale.
We like to meet the guys and gals that grow our stuff. We like to, whenever we have the opportunity, go out and smell the earth, see the blooms, and watch things grow. We like to offer meals that come from farms that have been growing and smoking and harvesting for decades. Makes us trust them.
All of this “commodity-fuel-cost” stuff is just food for your brain. Besides, what do we know? We run a restaurant.