by Steve Schmidt, Darby
Reducing the price of groceries requires a combination of short-term and long-term strategies involving governments, businesses, and consumers. If we have any hope of reducing grocery prices, we will need political leaders committed to applying these strategies.
We all see it. Grocery prices have exploded. From May 2014 to May 2024, grocery prices rose by about 33% cumulatively (U.S. Bureau of Labor Statistics Consumer Price Index data). Furthermore, it appears prices are expected to further rise significantly.
To address high grocery prices, we will at least need to consider agricultural production costs and who is controlling the prices we pay at the grocery store.
The costs to farm should be important to all of us. Afterall, if farmers can’t pay their bills, we won’t continue to have well stocked grocery stores. Farmers need to be able to repair their equipment. Requiring farmers to bring their tractor to the dealer for repairs puts an undue burden on farmers. Senator Tester was all over this issue.
Everyday costs for farmers such as energy, seed, fertilizer, equipment have skyrocketed. Unnecessary U.S. tariffs have collapsed some global markets for American farmers. The inability of farmers to sell their produce globally results in falling farm commodity prices. Many farmers simply won’t be able to make a profit and pay their bills.
Suburban sprawl has swallowed up much of our most fertile cropland. We should think carefully about the long-term impacts of new developments and subdivisions on local farmers and local food production. Fertile topsoil is not an unlimited natural resource.
We can help our local farmers by buying directly from them and avoid the middlemen who take their cut. This cuts down on food transportation costs and in turn we get fresher produce.
We can also support independent grocery stores and local food markets who are not beholden to big grocery monopolies and price fixing at a national scale.
Our politicians need to step up and deliver better consumer protection. Breaking up monopolies and enforcing anti-trust laws is one of the most powerful (but underused) ways to cut grocery prices long-term. The principal entity to protect consumers from price fixing and gouging is the U.S. Federal Trade Commission. The former head of the FTC, Lina Khan, was leading an aggressive anti-trust agenda. She worked to prevent market damaging big business mergers. The FTC sued and stopped the Kroger-Albertsons merger (2024), arguing it would kill competition and raise prices. That merger would have certainly raised grocery prices in many grocery stores. The take home here is that more grocery store competition results in lower grocery prices. By the way, Trump has fired FTC employees and pushed Lina Khan out of her job.
When just a few mega food corporations control the market, we consumers lose. For example, just four companies control 85% of U.S. beef (JBS, Tyson, Cargill, National Beef). Sadly, our ranchers don’t reap the profits they should. Instead, these big companies set the prices and take a big cut of the price we pay for meat.
Shrinkflation is a real thing. We often notice that many products contain less food than they used to. Here again, the FTC worked to look out for consumers and sued Walmart in 2022 for deceptive weights.
We need a fully staffed and well-funded FTC to help fairly regulate grocery prices.
We don’t have to just grin and bear high grocery prices. There are real solutions. However, politicians indentured to big business are unlikely to work on our behalf. We need to vote for politicians who advocate for and act on real and meaningful solutions to lower grocery prices.