Usually, reading about food price inflation is one of those boring topics that causes one to shrug his/her shoulders and then quickly move on to other more interesting news. Not so these days as inflationary world food prices have hit record highs! The situation is also continuing to spur renewed interest by Congressional leaders to investigate competition within the food industry.
At the latest reporting period, world food prices for March surged 13 percent from February and almost 34 percent above the previous year, reaching their highest levels ever. These dramatic increases come as the war in Ukraine continues sending shock waves throughout many global agricultural growing regions exacerbated by severe dry crop conditions here in the U.S.
The U.S. Department of Agriculture (USDA) issued a new report at the end of March which anticipates that food price inflation in 2022 will be 4.5 percent to 5.5 percent. Their prior outlook pegged the increase at 2.5 percent to 3.5 percent. Food at home (grocery stores) prices are forecast to go up 3 percent to 4 percent in 2022, an increase from the previous forecast of 2 percent to 3 percent from 2021 levels.
While high inflation has caused a lot of finger-pointing, some federal legislators are also saying prices are increasing in some agricultural sectors because of a lack of competition. I’ve reported this fact in recent columns when I stated that several U.S. federal government agencies, including the Department of Justice, were starting to renew efforts aimed at delving further into irregularities in supply chain consolidation that may have caused prices to spike. This is all very troubling as there is not much else that the Biden administration can do that is not already in their game plan arsenal. So, where is this all headed? See below.
Antitrust Laws Get Renewed Scrutiny
A bipartisan large group of Congressional representatives has sent a formal letter to the Federal Trade Commission (FTC) urging it to investigate and if necessary, bring enforcement actions against economic discriminatory actions that violate antitrust laws. What makes this letter so important is that it was signed by 43 members of Congress.
What’s the beef? One of the letter’s signatories, Congressman Louie Gohmert (R-TX), summed it up by stating, “The Robinson-Patman Act, the Sherman Act, The FTC Act were all passed to protect small business and encourage competition …….and to protect the pocketbooks of Americans and the ability for small businesses to flourish on a level playing field. The FTC must enforce the laws on the books and stop allowing big businesses to create monopolies and increase costs.” The National Grocers Association (NGA) applauded the actions taken by the 43 Congressional members and said in a written statement, in part, that “…we hope this bipartisan display of support from Congress will lead to a course correction in how U.S. antitrust laws are enforced.” Personally, I am not sure where all this inflation and discussions and investigations of so-called monopolies will lead but it is a road wrought with “potholes,” depending of course on which side of the aisle one sits.
President’s Fiscal Year 2023 Budget
Last month the Biden administration submitted to Congress the president’s budget for fiscal year 2023 and there was good news for FDA and USDA. Yet, coupled with the budget announcement were negative news media reports that crossed my desk citing serious dysfunction at FDA (see “FDA’s Food Failure” below).
How will the president’s budget specifically impact the food industry? At USDA, $111 billion is included for the Supplemental Nutrition Assistance Program (SNAP), a budget level that supports 43.5 million Americans per month! It also maintains funding for the SNAP initiative for Women, Infants and Children (WIC) at $6 billion. The budget also proposes to continue the provision of enhanced Cash Value Benefits (CVBs) through 2023 to ensure that all participating women and children have access to the scientific-based recommended levels of fruit and vegetables thereby improving health outcomes as well as program retention.
AT FDA, the budget builds on the successes of human food safety modernization activities and supports the agency’s continued implementation of the New Era of Smarter Food Safety initiative which I have commented on previously. This initiative improves food safety practices and enhances food traceability. To compliment the budget, FDA has also developed a package of legislative proposals to modernize dietary supplement regulations, tighten regulatory policies for monitoring infant formula manufacturing, and tighten policies for monitoring imported products.
FDA’s “Food Failure”
It goes without saying that the popular publication Politico is read cover-to-cover by Hill politicians and lobbyists and consultants alike who cover the Hill. Well, I can tell you that Politico’s recent months-long investigation into FDA’s food policies raised more than a few eyebrows on Capitol Hill. The publication claimed that “regulating food is simply not a high priority at FDA where drugs and medical products dominate” (the FDA agenda). Former FDA commissioners also readily acknowledged such problems.
Well, all the bruhaha certainly caught the attention of some key members of Congress. Senator Patty Murray (D-WA), who is chair of the Senate health, education, labor and pensions committee, sent a stern letter to FDA Commissioner Robert Califf demanding answers following the scathing report that she said ”lays bare a culture of delay and inaction in the agency’s food safety and nutrition center, which has endangered families health and safety.” Whoa! Senator Murray is seeking answers to what she says specifically is the apparent lack of FDA progress on food safety efforts, water quality used to grow produce, toxic substances in baby food, and sodium levels in food, among other matters. We will have to monitor all this to see where the debate is headed. Clearly the intent of all this is to get FDA to refocus on the purpose of the agency: FOOD and drug administration!
Dietary Guidelines Comment Period
You have only until May 16, 2022 to act. Act on what? As the first step in the development process of the Dietary Guidelines for Americans – 2025 to 2030, the U.S. Department of Health and Human Services (HHS) and USDA have released proposed scientific questions for public comment. This is all part of the re-writing of the official Dietary Guidelines that occurs every five years. Next in the process will be a call for nominations from the public for the appointment of the formal Dietary Guidelines Advisory Committee. The committee then conducts a thorough review of the questions and issues at hand and all this ends with the formal submission of a scientific report to the Secretaries of HHS and USDA. Once completed, the new Dietary Guidelines then become the “holy grail” throughout the food industry, nutrition field, and health community both within and outside of the federal government. The guidelines provide science-based advice and guidance on what to eat and drink to promote better health, reduce the risk of chronic disease, and meet nutrient needs for a healthier body.
If you want more information on this extremely important endeavor, a link to the specific Regulations.gov page is posted on the DietaryGuidelines.gov website.
Barry Scher is associated with the public policy firm of Policy Solutions LLC and can be reached at [email protected].