The National Farmers Union is again challenging Congress to hold hearings to re-examine the cause of high food prices. Congress held hearings this spring, essentially concluding that the food price increases were the result of high commodity prices. Since that time, however, commodity prices have fallen while retail food prices remain high.
"It is clear that contrary to claims of food processors, retailers and others quick to criticize agriculture commodities, commodity prices have little impact on the American consumers' cost of food," says Tom Buis, NFU president. "It's equally clear processors and retailers are pocketing the economic benefit of declining farm commodity prices and reduced energy costs without passing those savings on to the consumer."
Last February, Minneapolis milling wheat traded for $19 a bushel, and a loaf of bread sold for $2.79. Wheat has since dropped to $7.63 a bushel, yet a loaf of bread increased to $2.99, Buis points out. Corn prices have declined by approximately 45 percent since June, yet corn-based retail products have not had the same price decline. Further, the retail price of one pound of top sirloin was $7.99 in May and remains at $7.99 today. However, cattle prices have dropped from $91.60 per hundredweight to $88.60 per hundredweight.
In a letter to leaders of the Joint Economic Committee and House Small Business Committee NFU noted that previous testimony had unanimously blamed the rising cost of agricultural commodities and renewable fuels for increased retail food prices. "This portrayal of retail food prices is finally being proven inaccurate by recent market conditions," Buis says.
The spring congressional hearing included various agricultural and food industry representatives, including the Grocery Manufacturers Association, American Bakers Association and National Restaurant Association. Buis urged the congressional committees to invite the same witnesses to a new hearing.
Source: National Farmers Union