Show To Control Rising Food Pric Prices s As a nation we have become used to spending a very small portion of or our average income on food around 16 IG per per- cent Americans fo for the most part have been spoiled by or agricultural productivity productivity and the efficiency and innovativeness innovative innovative- ness of our food lood processing and distribution distribution dis n industries Still this doesn't change the fact that the average cost of food eaten at home b between January 1972 and January 1973 rose some 76 percent and that rising food prices are sure to cause more public dissatisfaction than similarly rising costs costs' 1 In ln a any y other area Some argue that food prices can be be tam tamed d only by rigid controls all the way back to the farm which would be the most possible c course urse from the standpoint of consumer welfare Massive shortage of many food product or rationing ra ra rationing and black markets reminiscent of World War II would be the result Thus it is essential that some facts about food prices become common knowledge The general pressure of inflation that continues to increase the dollar cost of l everything we buy has of course influenced influenced influenced in in- food prices But they have been nudged upward to an additional extent by bythe the fact that in the case of 01 a anum- anum number num ber of key su up ply is slightly short relative r 1 n demand em an There is no way price controls could cure lre this situation They would simply reduce the rate of f return to farmers and ranchers and make it impossible to invest the money money required to increase pr production Higher prices es will boost pro production but but it H takes time to get new newland newland land into use use expand facilities and boost tho the size of beef and dairy herds Increased Increased In In- creased creased supply su p y cannot come overnight Consider the matter of f beef beel prices which because of the average persons person's pr preference ference for lor this variety of f meat have been much in in the limelight Growth in beef demand has been greater than expected expected expected ex ex- ex- ex as the level of affluence in America America America Am Am- erica has risen This has been a major major ma ma- jor c cause use of 01 increased pressure on prices Also the price of feed which accounts for 80 percent of the meat producers producer's costs have gone up like an express elevator The kind of increase in beet beef production that is Is needed to meet demand de mand mend will not come from today's cattle population That means means' an additional Investment investment in In- vestment in breeding herds herds' that will produce produce pro pro- duce more beef That investment will only be made as ranchers receive prices prices prices ces for their cattle that are high enough to encourage such action Supply demand weather consumer tests massive sales of grain to th the Soviet Soviet Soviet So So- viet Union pr processing packaging transportation trans trans- porta cost of labor in retail stores stores- all aU of these things and more are part of the cost of food Another problem is that most peoples people's dissatisfaction with rising food lood prices winds up being directed at t the local supermarket But food retailers have been among the hardest hit by the Inflationary inflationary inflationary in in- process because it has not been possible in such a highly competitive industry to pass costs al along ng to to consumers consumers consumers con con- sumers as fast last as they have occurred On the average food chain companies earned cent per dollar doUar of 01 sales after taxes during the period 1964 Six years later this figure had dropped to 86 cents and by the third quarter of 1972 the average food chain company was earning only 3 cents per dollar of sales What it all aU boils bolls down to tois is that the forces of 01 inflation all along the line combined with rising demand for par par- titular food items has finally hit Americas Am Am- Americas America's Americas America's erica's grocery bill just as as it has everything everything ev ev- everything else and no ones one's getting rich richin richin richin in the process The one thing that docs does appear to be certain is that the way to cure the situation situation sit sit- station is not to further restrict supply by slapping killing incentive-killing price controls controls controls con con- on the nations nation's food producers It is a time for a little patience some understanding of 01 the tho forces that are at work and some changes in buying habits habits hab its in the interest of greater economy Also it is time for a little faith There is every reason to believe that the competitive competitive competitive com com- free marketplace will continue to fill the nations nation's market baskets at the lowest possible cost just as it always has dune done |