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Rising Food Prices: Blame Obama, Drought, or GOP Thinking?

Last updated on 2013.07.09

...or get a statistical grip?

The GOP unleashed an attack on President Obama recently arguing that since grocery prices have gone up 14.5% since Obama took office, folks should vote for someone else. Never mind that, with 24 meat items and 33 five-pound bags of sugar, the GOP's sample grocery list bears little resemblance to reality. I know my own grocery list (heavy on breakfast, the most important meal of the day!) is costing more, so whose fault is it?

If the President is to blame, we must find his magic rain-stopper and solar intensifier (is that what Solyndra was working on?), as basic economics tells us that the drought is reducing crop supply and quite naturally raising prices. Voting against the President because of the drought makes as much sense as firing Jay Trobec for your picnic getting thunderstormed out.

The drought should actually cause the price of the GOP's meat-heavy list to go down, since ranchers whose grazing lands have burned up and who can't afford feed have to sell off their herds, driving down prices with more supply. The meat glut will be temporary, maybe through the end of the year, and supply will tighten and prices will rise after that (you want to ride that bull, Romney-Ryan?). The President's new policy to help livestock producers by increasing federal livestock purchases (including catfish!) may temper even that temporary price decline by bringing another bidder to the market.

But let's back up. In an interview with The Daily Beast, Stickney farmer Tyler Gerlach questions the drought-food price math:

Still, many of the farmers affected by the drought resent that they are already being blamed for higher food prices in the rest of the country. It's a math equation that doesn't make much sense, especially on grain-based foods. The U.S. Department of Agriculture estimates that only about 10 percent of individual products like bread are affected by the cost of grain. The rest is attributed to processing, packaging, and transportation.

"I'm not sure I get the math," says Gerlach. "Some of the food prices should not be affected by this drought. Someone along the line is taking advantage of the bad news and making a profit on this drought" [Barbie Laiza Nadeau, "Midwest Drought Forces South Dakota Farmers and Ranchers to Abandon Crops and Thin Herds," The Daily Beast, August 5, 2012].

Hmm... maybe Big Ag, which gives more than twice as much money to Republicans as to Democrats, is using the drought to pad its pockets and boost its preferred Presidential candidate, Mitt Romney.

One could argue that Republican policies are as much to blame for food price increases as anything imputed to President Obama. To the extent that bad weather does contribute to higher food prices, Republican resistance to climate change science and policy responses has ensured that farming will get tougher. Republicans have worked hard to keep us addicted to oil, the high price of which was key to the 2008 food price spike and which isn't helping matters now. Ethanol has helped us use less oil, but it creates food-fuel price competition. The ethanol mandate that some governors and livestock producers want the EPA to suspend is backed by President Obama but came from the Bush Administration.

Figuring out who's responsible for your higher grocery bill is complicated. If you want to blame President Obama for not giving your cheaper Wheaties, I may not be able to stop you.

But let me take one more swing at it, a statistical swing. Check the Consumer Price Index for food and beverages for the last five decades. Here's what my spreadsheet tells me for the price of food and beverages:

  • Annual increases during first three years of Obama Administration: 1.9%, 0.8%, 3.6%.
  • Annual increases during first three years of GW Bush Administration: 3.1%, 1.8%, 2.1%.
  • Average annual increase, 1967–2011: 4.4%
  • Four-year increase, first half of 2008 to first half of 2012: 10.5%.
  • Four-year increase, first half of 2000 to first half of 2004: 10.8%.
  • Average four-year increase measured at mid-year, 1988–2012: 12.6%

These stats suggest three things. First, the GOP spinners are reading the CPI data wrong, since their estimate of increased costs during the Obama Administration overshoots the official figure by four percentage points. Second, food prices are going up, but they are actually going up at rates lower than recent historical averages.

And finally, even if you want to use your rising grocery bill to justify your Presidential vote, those of you who voted for Bush in 2004 will have to vote for Obama in 2012, since he's doing about as well on grocery prices as Bush did.

31 Comments

  1. moses 2012.08.19

    C.H. quit telling the truth because they cant handle it.

  2. Justin 2012.08.19

    We are headed for an unprecedented third straight year of decreased U.S. corn production. I think last year was only the second time it had decreased two straight years.

    Many economists say we aren't an oil based economy we are a corn based economy. The amount of corn production that is earmarked for ethanol just makes demand and prices higher.

    Although sugar shouldn't be too bad, its cheaper than corn syrup now.

  3. Julie Gross (NE) 2012.08.19

    Come on.

    Gas twice what it was in Jan. 2009, corn prices at $8--there is NO DOUBT food prices have and will increase.

    You can argue all you want about why & who is to blame, but $8 corn (sweetener, animal feed = higher meat prices) and $3.75 gas INCREASE food prices.

    Do you EVER go to the grocery store?

    Explain your CPI figures to the record number of folks on food stamps, or the record number of black families in poverty, or the record numbers of black teens without jobs--you can't eat blogs.

    Stats don't come close to explaining the abject MISERY that has grown in the past 4 years.

  4. Justin 2012.08.19

    So you blame the President for oil prices and corn production?

    Interesting. It's probably his fault nobody likes you, too.

  5. Julie Gross (NE) 2012.08.19

    Red herring. blah blah blah
    Red herring. blah blah blah
    Red herring. blah blah blah

    Wow, it doens't sound very intelligent, does it?

  6. Justin 2012.08.19

    No, more like fact + ad hominem.

    You can dish it out but you can't take it.

    Which Obama policies are responsible for the draught and oil prices, my gross lady?

  7. Justin 2012.08.19

    And no, it doesn't sound intelligent that is why I'm mocking you.

  8. Julie Gross (NE) 2012.08.19

    --Which Obama policies are responsible for the draught and oil prices, my gross lady?

    It's not as much about responsibility as it is about accountability.

    BTW, where did I blame the president?

    Do you have trouble reading?

  9. Julie Gross (NE) 2012.08.19

    --No, more like fact + ad hominem

    In order to complete an ad hominem attack, one needs to be personal--which person did I blame for corn & oil prices?

  10. Julie Gross (NE) 2012.08.19

    Are you still embarrassed about not knowing libel isn't a crime in SD?

    That's quite an ego you have to tame.

  11. Justin 2012.08.19

    Wow, it takes three posts for you to contribute that?

    You talked about the last "four years" of misery. Your innuendo was clear.

    Why don't you whip out your economics degree now and tell me that tax cuts pay for themselves?

  12. Julie Gross (NE) 2012.08.19

    --Why don’t you whip out your economics degree now and tell me that tax cuts pay for themselves?

    When did you stop beating you wife?

    When did you stop kicking your dog?

    Libel is a crime--priceless.

  13. Garyd 2012.08.19

    These FACTS have been presented before but it seems we need to go over them again!

    Fact 1. In a box of corn flakes even with corn at the $8 level, there is approximately 12 cents of corn in that box.

    Fact 2. Many of the same people that are complaining about farm program payments today were complaining about them back when corn was under $2.00!

    Fact 3. The ethanol industry was started because of those low corn prices.

    Fact 4. Those that throw out the 42% figure that is the amount of the corn crop being used to produce ethanol almost ALWAYS conveniently forget to mention that 1/3 of that comes back into the market as a high quality feed product that is consumed by the livestock industry so that the 42% figure is much closer to 28%.

  14. Julie Gross (NE) 2012.08.19

    --The President’s new policy to help livestock producers by increasing federal livestock purchases (including catfish!) may temper even that temporary price decline by bringing another bidder to the market.

    Essentially he's trying to buy their votes, right?

  15. Julie Gross (NE) 2012.08.19

    --Hmm… maybe Big Ag, which gives more than twice as much money to Republicans as to Democrats, is using the drought to pad its pockets and boost its preferred Presidential candidate, Mitt Romney.

    If such a small portion of raw ag products goes into food (as we're told), how do rising food prices benefit Big Ag to any large extent?

    Your point doesn't make consistent sense.

  16. Julie Gross (NE) 2012.08.19

    --Hmm… maybe Big Ag, which gives more than twice as much money to Republicans as to Democrats, is using the drought to pad its pockets and boost its preferred Presidential candidate, Mitt Romney.

    Wow, that's odd because its Reps in the Senate who are trying to trim the Big Ag fat and handouts to Big Ag from the Dem's pork-laden $1 TRILLION farm bill.

    Of course, the Reps in the House have already passed a $380 billion emergency measure but the Dems in the Senate and Obama have refused to move on it.

    Rant all you want though.

  17. caheidelberger Post author | 2012.08.19

    Julie, slow down, and tell me why we can't trust those stats. They are the best price stats we have. We can talk about anecdotal "misery," but the numbers don't lie just because you want them to. I don't like my higher grocery bill, either, but these stats serve as a more reliable, non-biased memory that says, "Gripe all you want, but you been dealing with grocery-price increases like this—and larger ones—for years."

    Hmm... maybe food prices are going up because of the regulatory uncertainty Kristi Noem and the House GOP have caused by not passing a Farm Bill.

  18. caheidelberger Post author | 2012.08.19

    True, Gary, we do get the livestock feed product back from the ethanol-making process. Is that stuff as good for cows as straight corn? Does it add any value?

  19. Donald Pay 2012.08.19

    I would think the GOP would talk about taking some personal responsibility. You can escape the inflation in the ag commodities by growing your own food and changing your diet. Cutting out processed food, where corn products mostly end up, and decreasing beef consumption is a way to improve health and save money. Eat real food produced by real farmers, not the stuff the corporate ag industry shovels out there.

  20. caheidelberger Post author | 2012.08.19

    Yes, Donald! With his nice tomato garden, I think we can get Dennis Daugaard on board. Grow your own food, eat healthier, lower you grocery and health care costs... self-reliance!

  21. Stan Gibilisco 2012.08.19

    I don't care what, or who, is to blame for rising food and gas prices. I want to know what, if anything, we can do to mitigate the problem.

    One thing I can say with confidence: We have to bring spending in line with revenues. Otherwise we should expect to see big-time inflation come along pretty soon.

  22. Justin 2012.08.19

    Amen, Stan.

    One thing I can guarantee is that a 20% across the board tax cut and elimination of all capital gains taxes is not a step in that direction.

    I will also make the relatively easy prediction that if we continue to threaten to default on our debt every time we debate the national budget there are eventually going to be dire consequences.

  23. Donald Pay 2012.08.19

    We found it is cheaper to eat good foods, than consume corporate food. Beef has been high for a while, so we cut way back some time ago. We were eating way too much red meat anyway, and switching to a healthy diet saved us money. We've cut back on other meat as well, so that we now eat probably one-fourth the meat we used to. We would rather spend the money we used to spend on red meat to eat salmon and other fish to get the good fatty acid content. Also, we cut out most processed foods, and eat raw or lightly cooked veggies, which are cheap in season. We expect this diet will save us and the taxpayers some money as we move onto Medicare in the next five years. Good old Republican personal responsibility is a way to fix a lot of problems, so stop whining about the Kenyan in the White House and start doing your part.

  24. Julie Gross (NE) 2012.08.20

    --We can talk about anecdotal “misery,” but the numbers don’t lie just because you want them to.

    What makes you think I was talking about ANECDOTAL misery?

    You're right, the numbers don't lie--Barry Obama's misery index is horrendous:

    http://www.miseryindex.us/indexbyPresident.aspx

    To my other points: black unemployment & black teen unemployment are at HISTORICAL highs under your president--the numbers don't lie.
    COME ON!

    Talk about dressing up a stinking pig in some pink dress of not-so-bad food prices. The rising or falling or stagnant price of food does not matter one bit when you're out of a job!

    Get real Cory.

  25. larry kurtz 2012.08.20

    "Residents of Wyoming, South Dakota, West Virginia, and Vermont expect the least improvement." Gallup.

  26. caheidelberger Post author | 2012.08.20

    Donald: cutting meat consumption by 75%? Have you noticed any health effects, good or bad?

    Julie: so you cite a statistic that does not indict the one I offered. If you want people to vote on the Misery Index, that's fine, but it doesn't negate the argument I'm making that voting based on your grocery bill produces non-unique results for Obama compared to Bush and historical averages. The GOP argues that grocery prices are increasing at uniquely high rates under Obama. I refute that with data. Once again, you barge in and want to argue the point you prefer rather than the one I'm making (and winning on).

  27. caheidelberger Post author | 2012.08.20

    Plus, [darn, I'm biting] the Misery Index has been trending down from its recent max of 12.87 last August. It's down over 3 full points over that period. Four More Years!

  28. caheidelberger Post author | 2012.08.20

    Dave, I guess we can't blame an industry for challenging any perceived threat to the maximization of its profits. But USDA should toughen up and not cave to industry pressure. The "Meatless Monday" campaign wasn't out to force anyone to do anything; it was simply pointing folks toward somewhat healthier (and, as Donald notes, more affordable) eating.

  29. Greg C. 2014.09.29

    The problem with folks like Julie isn't that they are consuming high priced food. The problem is they feed there brain with the back ground noise of talking heads like Rush Limbaugh and only get there News from opinion based networks that have literally helped radicalize the republican base with anger and bias opinion. Never in history have so many people claim to be patriots but disrespect the highest office in the land. There was a time in our country when the election cycle was over you got behind your president regardless of party for the good of our nation. Regan is always held up as a God in the GOP but they forget Regan got things done because he worked with the other side on important issues. Grid lock is hurting everyone even those that think they are on the right side of history. You can always tell when someone has been brain washed by these hate mongrels. First they can't acknowledge any good on the other side and you stop them dead in their tracks when you ask for the statistic to support their outlandish claims. The fact is this is a world economy like never before and the president needs to be able to work with both the house and senate to shape policy that is in our best interest. When the other side is always just working for the next election or serving the interest of their biggest donors everyone suffers. Not to mention our country is weakened on the world stage when extremist point to all the in fighting to justify that America is no longer a great country. Patriotism is working together for the good of the country. Julie needs to get her information from more then one source. The scariest part is the curtain only need be pulled back slightly and the truth begins to appear. But with enough anger being fueled by hate speech from extremist these sheep prefer to follow blindly.

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