Greed, not farmers, leads to higher prices

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A recent Associated Press article mentions food prices generally lag behind other commodity prices. As one analyst asserted, "basically, there's only a few cents' worth of corn in a box of corn flakes, so food prices are much slower to react to the downside than energy prices."

That is all well and good and quite in line with modern economics. However, the real issue is "a few cents' worth of corn in a box of corn flakes."

In today's marketplace, food produced by the farmer is treated as a cheap raw material that is processed into a "value-added" product and sold to the consumer at a high price. For example, wheat used to be $3.50 a bushel and then went up to over $10 a bushel last winter.

At 60 pounds per bushel, the farmer's price went from 6 cents to 17 cents per pound. So, did the price of a loaf of bread go up 11 cents?

Hah! The food processors jack up the price much more than the actual cost of the cheap raw material.

The reason for higher food prices is not the higher prices paid to farmers, but the greed of the food processors, wholesale distributors, and supermarkets.

Walter Haugen

Ferndale

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