What’s Driving Record Food Prices? What Are Your Options?

Higher Oil Costs

Food costs have soared this year mainly due to increased oil prices which, in terms of food production, is affecting everything including the cost of fertilizers, food transport, and industrial agriculture. In Hawaii, the increased cost of food is aggravated by the higher cost of transporting the goods to the islands. Fully 80 percent of Hawaii's food products are imported via ship or airplane.¹

From a larger perspective, manufacturers across all industries are being forced to increase prices due to higher energy and utility bills, gas, and shipping costs.

Trend Towards Biofuels

Another factor contributing to record food costs are Federal policies encouraging increased use of ethanol and other biofuels over oil for energy. Growers are now diverting large amounts of farmland from food production to corn-based fuel, which is creating a shortage in food supply. In fact, according to a confidential World Bank report that was leaked to the news media in early July, biofuels have been responsible for up to 75 percent of the increase in global food prices — far more than previously estimated. ^{2, 3}

Without the increase in biofuels, says the report, global wheat and corn stocks would not have declined appreciably and price increases due to other factors would have been moderate.

According to the news articles, World Bank says production of biofuels has distorted food markets in several ways. It diverted grain away from food to fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, public policy has encouraged farmers to set land aside for biofuel production. This has sparked financial speculation in grains, which is driving prices up.

Overall Cost Increases

Prices have increased even more due to higher costs of commodity items including agricultural products (oils, sugar, potatoes, onions; coffee and tea; rubber and spices, etc.), metals, and electricity and so forth, as food manufacturers raise prices to recover production costs. The increased cost of healthcare is another significant factor driving prices upwards, as businesses recover increased costs by raising prices for the services they provide. Combined, all of these factors are having a cascading effect on the economy as businesses and industrial companies pass on their increased costs to consumers.

Trend Towards Increased Meat Consumption In Developing Countries
Adding pressure to increased food costs is the trend in developing nations towards more meat consumption. Higher incomes have made hundreds of millions of people rich enough to afford meat and other foods with meat ingredients. As people eat more meat, more land is required to grow crops that are cycled through animals rather than fed to people directly.

Calorie for calorie, you need more grain if you eat it transformed into meat than if you eat it as bread: For example, it takes 6.6 pounds of cereals to produce 2.2 pounds of pork, 17.6 pounds for 2.2 pounds of beef.

So, a shift in diet is multiplied many times over in the grain markets. Since the late 1980’s an unstoppable annual increase of 1-2% in the demand for feed grains has ratcheted up the overall demand for cereals and pushed up prices.⁴

Therefore, another cause for the food crises is the increased amount of meat being eaten around the world due to people adopting the western diet as they grow wealthier. Ironically, virtually all the prominent scientific organizations and government agencies throughout the world have confirmed that a meat-based diet is worse for one’s health. So, transitioning to a western, meat-based diet is leading to higher disease rates in developing nations.

The Vegetarian Solution

Nature has provided ample vegetables, fruits, grains, legumes and dairy products for human sustenance, so eating meat is an unnecessary “luxury” rather than a necessity.

At Down to Earth, all vegetarian, organic and natural foods are available at affordable prices and they offer great value for several reasons:

• Eliminating or reducing meat from your diet cuts one of the most expensive items from your food bill.
• Natural foods often cost less than conventional alternatives because they are not promoted with expensive advertising that drives up prices.
• A wide range of foods in bulk supply allows customers to buy the amount of their choice without having to pay for expensive advertising and packaging that drives up the cost.
• Local organic produce typically costs less than imported conventional produce because there are little or no shipping costs. Even imported organic produce is comparable in price to conventional produce.

Down to Earth helps keep food costs affordable for Hawaii’s community by regularly offering thousands of items at promotional or every-day low prices, and we constantly look for great deals to offer our customers.

So, as you think about ways to survive the current crisis in food costs while maintaining a healthy diet for yourself and your family, consider this reality: Contrary to popular belief, eating a healthy vegetarian diet based on organic and natural foods does not cost more than conventional foods, and is often less expensive

As always, thanks for shopping at Down to Earth.

Mark Fergusson