Last month, I began my commentary for the new year by stating that the 2024 presidential elections were underway. In addition, I stated that both the House and Senate chambers were starting their quest for majority control come November. Then I said that there was still a lot of unfinished business left over from 2023 that needed attention on Capitol Hill including budget and funding legislation, aid to Ukraine and Israel, and the country’s border security issues, etc. I also highlighted that of specific importance to our food industry was reauthorization of the massive farm bill, which establishes five-year policy dealing with a myriad of farm to fork issues impacting farmers, processors, manufacturers, distributors, retailers, and of course, consumers. So, now that we are in the second month of 2024, what has happened to address these concerns? Not much, unfortunately.
At press time, the House opted to kick the can down the road again on government funding until early March. The Hill Morning News Report summed it up by stating that “The upshot is that funding for federal departments and agencies extends now until March 1 and March 8, which is viewed as a necessary extension that is helpful to appropriators and reassuring to America’s financial markets and national political candidates. In other words, House and Senate members applied a legislative Band-Aid to spending decisions to last another seven weeks.” So, between press time and late February, you should know that the House and Senate will be in session at the same time for just seven days. That is not much time to take care of a lot of unfinished business. March cannot come soon enough. Let us move on to other newsworthy events impacting our food industry. Read on!
Children To Receive Food Benefits
Nearly 21 million children are expected to receive new grocery benefits this summer as the U.S. Department of Agriculture has just announced the launch of a new permanent summer Electronic Benefits Transfer (EBT) program. USDA estimates that the new summer EBT program will serve close to 2 million children, providing a total of nearly $2.54 billion in grocery benefits. This equates to about 70 percent of the total population of children eligible for Summer EBT. The program will be expanded in 2025 to include those not covered by the 2024 program launch.
How does the new program work? Through the new summer EBT program, states will be providing families with $120 per eligible child to purchase food at grocery stores, farmers markets or other authorized retailers – similar to how the Supplemental Nutrition Assistance Program (SNAP) benefits are used.
Currently, USDA’s Food and Nutrition Service works to address hunger and improve food and nutrition security through a consortium of 16 nutrition assistance programs, including the school breakfast and lunch programs, Women Infants Children Program (WIC), and SNAP. Together, these programs serve one in four Americans over the course of a year, promoting consistent and equitable access to healthy, safe, and affordable foods for optimal health and well-being.
Farm Bill Update
Kicking the can down the road to avert a government shutdown has also slowed down passage of the five-year farm bill. House Agriculture committee chair G.T. Thompson (R-PA) is still saying he expects to move the farm bill next month, but we have heard that before. We at Policy Solutions just do not think that will happen. Of course, I would love to be proven wrong. However, even some House members are now saying privately that the more than $1 trillion agriculture and food bill may not move until after the November elections, if it does at all in this session of Congress. From our viewpoint, even after the elections and until the new Congress convenes in January, moving any legislation during a lame duck session is a huge undertaking, especially legislation as critically important as the farm bill is to the food and agriculture industry. Bottom line: we continue to think the 2018 farm bill will end up being extended again until 2025.
Fiscal Condition Of Our Government
Needless to tell you that the U.S. budget deficit is huge, and our federal debt continues to grow. Note: the federal budget deficit for December 2023 was $129 billion compared to $85 billion for December a year ago. Debt held by the public at the end of December 2023 was $26.8 trillion. Heard enough?
Well, there may be some good news on the horizon when it comes to tackling our fiscal house. The House budget committee has advanced legislation that would create a bipartisan fiscal commission to produce a solution to the government’s worsening budget outlook and propose it to Congress for expedited action. The bill creates a 16-member fiscal commission, evenly comprised of Democrats and Republicans, and includes four non-voting members from outside Congress.
The commission’s tasks include writing a report to Congress and creating new legislation to improve the long-term fiscal condition of the federal government, reduce deficits and debt, achieve a sustainable ratio of debt to gross domestic product by fiscal 2039 (that’s right – 2039!), and improve the solvency of federal trust funds, including those that finance Social Security and Medicare. This is good news for sure, but things certainly move at a slow pace on the Hill.
FMI: Shoppers Optimistic About Grocery Prices
More good news is that grocery inflation slowed to 1.3 percent in 2023 compared with 11.8 percent in 2022, according to the Consumer Price Index, and food-at-home inflation slowed in December to 0.1 percent, the same rate as November. “Weekly household grocery spending has remained stable since the summer of 2023 while concerns related to escalating food retail prices have eased slightly since October,” said Andy Harig, vice president of tax, trade, sustainability, and policy development for FMI – The Food Industry Association. “As we enter 2024, there is a growing sense of optimism among shoppers regarding grocery prices in the year ahead.”
Need more assurances that consumers are trotting back to food retailers? Here is an added tidbit thanks to the Kroger Company. As some of you may know, Kroger has its own in-house data research firm and they just reported that after surveying their latest data base, consumers are planning to spend more money on groceries and less on eating at restaurants, carry out, and for food delivery services in 2024.
Defining Full-Time Job Status
The U.S. Department of Labor in early January issued its final ruling on what constitutes full-time worker status under the Fair Labor Standards Act – a rule that will impact delivery drivers and gig workers across the country (gig workers are defined as independent contractors, on-call workers, and temporary workers).
According to an item about this issue in Supermarket News, the ruling aims to clarify misclassifications of workers status, an issue the Labor Department described as “a serious problem that impacts workers’ rights to minimum wage and overtime pay, facilitates wage theft, allows some employers to undercut their law-abiding competition and hurts the economy at large.”
The final rule, which goes into effect on March 11, 2024, rescinds an independent contractor rule from 2021, which limited factors that could be considered when determining worker status, such as its prohibition on “considering whether the work performed is central or important to the potential employer’s business.”
The announcement prompted responses from companies like DoorDash, which employs thousands of delivery drivers, and organizations like the National Retail Federation, which oppose the new guidance, saying the new rule is unnecessary in the modern workplace.