If you don't like the price of your Pepsi, buy Coke. Or buy the store brand. Or do your health a favor and don't buy that garbage food in the first place.
The issue is that the prices of staples have also been increasing precipitously an there have been clear cases where prices have risen universally across suppliers in a 'why leave money on the table, our competitors have raised prices, let's match them' type of way.
Something does need to be done about that type of situation; in a properly working free market the competitor would gleefully accept having 100% of the market and waiting for the high price supplier to go bankrupt or lower their prices. Instead you're seeing what appears to be cartel-like 'we've got your back' from suppliers. This was most recently visible with eggs.
You can post articles from Vice, Oxfam or even Jacobin Mag. Just don't share the canonical sources debunking socialist canards. Articles from laissez-faire economists eloquently describing the problem of economic calculation aren't valued here. HN prefers the pop-culture journalists at Vice Magazine to rehash the virtues of price controls.
For example, one of the first items mentioned in the article is how prices are regulated in France, which is really not traditional price controls:
> France has set up a food pricing system that will sound foreign to American ears: Consumer goods companies like PepsiCo must negotiate with the country’s grocery stores on prices in the stores during a set period. If they can’t come to a compromise, PepsiCo won’t be able to get its products on the grocer’s shelves. The negotiations provide French consumers with a small but valuable piece of power, and President Emmanuel Macron has been trying to use the system to his advantage as he aggressively pushes to get the country’s high food prices down, saying they should reflect the fact that the prices of many raw materials have recently declined.
That's not really how people think of traditional price controls, it's just saying that prices must be negotiated once per year. Of course, what the article leaves out, and which is mentioned in the link at https://www.reuters.com/world/europe/french-bill-moves-food-..., is that only negotiating once per year means that if prices are set high in the beginning of the year, there is not a chance to reset lower until the following year. So consumers get the benefit of higher-stakes negotiating power, but you've got to live with that outcome for a year.
I also despise the "blame inflation on corporations just taking more profits" line of thinking, because it's usually made from as a braindead assertion without any follow up. That is, basic economics 101 says that competition should keep corporations from taking undo profits. So if corporations are able to drastically increase their profits without new competition coming in, it means that either (a) there is something about the market that is fundamentally broken, e.g. monopoly pricing power or collusion, or (b) the price increases really are warranted, and companies are worried about price pressures in the future. That is, so often I see the argument being made of "companies are gouging us for profits, we need price controls!" as opposed to "companies are gouging us for profits, what is broken in the system that is allowing this to happen in the first place?"
>France has set up a food pricing system that will sound foreign to American ears: Consumer goods companies like PepsiCo must negotiate with the country’s grocery stores on prices in the stores during a set period. If they can’t come to a compromise, PepsiCo won’t be able to get its products on the grocer’s shelves.
This is absolutely price controls, complete with their inevitable result: The non-availability of the good.
Trying to avoid the classic Internet "every argument is over semantics" debate, but I think that when most people hear "price controls" they are imagining that it's when the government sets limits on prices that can be charged for particular products. So whatever you want to call it, what France is doing is definitely not that.
Is food really that expensive? I eat mostly beef, yogurt, eggs, small canned fish like sardines, a few vegetables and fruits and I find sell by mark downs all the time on beef that I stock up on and freeze. Like just a few dollars per pound. Same thing with eggs, they have price spikes sometimes but a lot of times they are about 10-20 cents per egg. So like 8 oz serving of beef and a few eggs is like $4 per meal total.
Maybe olive oil prices have gone up and some others or lots of packaged and processed foods. But from a PRICE PER NUTRITION standpoint (real food like beef, eggs, etc), I dont find food costs all that bad.
Price per calories for junk processed foods like snacks and juices is a different argument I guess.
I will also add when times are tough you can quit spending money entirely on carbohydrates. Your body cant produce fats or proteins but It can produce all the glucose it needs endogenously. You can supply yourself fats and proteins your liver will take care of making glucose just fine.
I hear this repeated all the time, but it rings false.
Convenient junk food is quite expensive compared to “real food” like meat, uncooked pasta, fruits, vegetable, etc which are healthy but require some preparation.
The argument then goes: “well, ok, but poor people don’t have time to cook”. Which again rings false. The poor people I’ve known have an abundance of time and are not working 3-4 jobs to make ends meet.
The 'no time to cook' stuff is also plainly false because of handy inventions like pressure cookers. Spend 10 minutes prepping the ingredients, toss them in, do whatever, when you're ready to eat - the food's ready to go. And it's not like roughing it or whatever - you can make some hella delicious meals with precious cookers, and you can get a reasonable one for about a day of minimum wage work.
I agree, thats why chose to put PRICE PER NUTRITION in all caps because there is a huge difference when someone spends $4 for a carton of eggs vs $4 for a bag of potato chips for example. Everyone seems to complain about food prices but everytime Im at the grocery store I see carts filled to the brin with nutritionally worthless processed foods.
And prep is easy, I guess my tastes are simple - beef, eggs, salt maybe a litle hot sauce. I can cook 3 pounds of ground beef and add about 10-12 eggs in a 12" fry pan and have 3-6 meals in containers in about 45 minutes.
I have some food allergies and cook everything from scratch at home so I know it can be cheap to cook yourself but there are some processed foods that are just cheap for the calories especially things on sale.
Other factors like limited transportation and space in a backpack or bag to carry home can make bulk savings harder.
Yeah you can eat rice and beans for cheap, but that’s not really a completely nutritious diet. I’ve eaten it a lot!
One of the best "simple cooking healthier" tips I've ever received is to cut up onion, bell pepper, etc. and then freeze majority for sparing use in other dishes. After becoming college poor, this began my exploration into healthier eating. I now add onions/peppers to every hot dish.
The additional flavor makes food seem more filling, and isn't expensive. Also: potatoes.
Cooking for yourself is cultural. If it's not in your culture you won't do it. Price controls won't fix food prices. Good luck having the government fix culture.
Completely unhelpful perspective, no one has experience feeling hungry or building food budgets before they were born or had the responsibility to earn money for buying food.
Unhelpful or not, it is factual. Food today is cheaper than in the 90s and 00s as a percentage of income. Those are the times people long for and are nostalgic about in terms of pricing.
Food prices have escalated a significant amount in the last couple years. You would notice it if you have to feed a whole family. In many cases you subsidize to lower quality items or don't purchase items you used to in the past.
Unit prices have gone up for processed foods, core protein and vegetables considerably and, in many cases, the quality has decreased.
Food prices didn't escalate, the dollar became worth less because of intentional inflation (needed to offset the massive federal spending spree during covid). Food prices are the same as they were pre-inflation.
I find those discounts too, but it's annoying that I have to.
The prices pre- and post- pandemic are undeniably higher for staples. I used to pay $4.99/lb of ground beef at regular sticker prices at Trader Joes, Whole Foods, etc. back in 2019. Those same offerings are consistently $5.99+.
To some it's certainly a small increase, but I see similar impacts across other products as well, and it all adds up. For example, Kerrygold butter used to go for $5.99 and now regularly goes for $7.99. Almond Milk used to be $3.99 ($2.79 on sale), and now routinely goes for $5. Most Cold Brew products I purchase have gone from $5.99 to $6.99 or $7.99. And Cream Cheese is one of the worst - 2 bars of Philadelphia Cream Cheese used to be $6 and now regularly sell for $9 - $10.
It's everywhere. I'm in NYC / LA, so might be different elsewhere (I'm sure these prices look insane to most people outside of cities).
Not sure where you are near NYC, But I regularly buy 10lbs of chicken breast or boneless thighs for 1.99lb. for chopmeat I buy in bulk and most of the time for 1.99 lb at 10 lbs a pop. If I run out of the beef, can still get for 2.99lb.
During shoprite sales I get enough canned veggies, pasta, tuna and tomato sauce/pureed for a year for under 200, then really all for the year is some meat, fresh veggies and fruit.
Take the time and effort and you can save hundreds or a thousands a year or two on your shopping costs.
Trader joes, king kullen and some others are the most expensive places you can shop, and when dealing with meat I will go to grocery store or the local butcher when they have a sale and stock up for months.
I am single dad feeding 3, so every dollar counts in the end.
Perhaps but if I had a family to feed the bulk size packages are so much cheaper per pound than the smaller qty it almost is a negligble difference sometimes.
I'm in Southern California and do most of my day-to-day shopping at Trader Joes and even I agree. Even with a diet that is really heavy on the expensive stuff like steak and avocados.
The most expensive beef I buy is prime top sirloin steaks at costco for $9-10/lb and ribeye roasts (that I cut up into steaks) at the local halaal market are $8/lb or less. Tenderloins for kebabs and filet mignon is $6-8/lb at Ranch 99 or Shun Fat. The most expensive chicken I get is Costco tenderloins for chicken tenders that sometimes rise to $7/lb but otherwise chicken breast is $3.5/lb or less. The oxtails and neckbone for good beef stock are more expensive than most of the meat I usually eat!
I suspect I'm just really privileged and don't know the meaning of a food desert. The number of ethnic grocery stores here in SoCal guarantees that it's easy to find a cheap source for every ingredient imaginable. The key is to shop there and not at the big names like Safeway, Vons, Ralphs, Albertsons, etc.
Nothing proposed in the article will achieve the desired ends, but it will only serve to centralize more power with the federal government.
The only way to achieve reliably low prices is to allow deflation to happen, which means government gets out of the way of innovation, lowers regulatory barriers, and stops printing so much money.
Many decades ago the US gov decided to create corn subsidies with the idea of high production of calories and energy. Ethanol in gasoline is a wealth creator.
If the USA withdrew from this, farmers would likely switch away from corn. Within a few years we could 10x meat production. Large open pastures producing grass fed meats would be a far better choice.
> If the USA withdrew from this, farmers would likely switch away from corn. Within a few years we could 10x meat production. Large open pastures producing grass fed meats would be a far better choice.
First, you can't convert all current farm plots owned by independent farmers into contiguous grazing land, and second, animals need tons of vegetable nutrition. Lots of that corn is already diverted to animal feed - grasslands aren't going to be more productive for animal calories than engineered corn. That's why we actually need to be decreasing meat production - it's incredibly wasteful.
If you believe we could 10x meat production by replacing corn (which... we can't), we could just 200x vegetable production instead. Obviously that makes no sense to replace vegetables with vegetables on the same land and get orders of magnitude more crops.
The conclusions you should be drawing is that we should stop subsidizing corn for HFCS as an unhealthy high-calorie filler and instead subsidize nutritious vegetables like legumes.
> Large open pastures producing grass fed meats would be a far better choice.
The vast majority of cows are already pasture raised in the US. Those feedlots with packed pens serving tons of corn feed that most people think of when they think of factory farming is only the last step of the process called finishing that improves the fattiness and flavor of the meat for human consumption.
The corn that's used for bioethanol is actually later fed to cows at those feedlots as distillers grains [1]. It accounts for a significant fraction of animal feed so eliminating bioethanol would make beef more expensive, not cheaper.
Here's an idea - implement price controls (as the article suggests), but only for milk, eggs, fruit, raw grains, basic meat etc. Pepsi and Oreos can cost whatever the manufacturer wants. I'm willing to bet though that the people who routinely complain about their grocery bill being too high will still not be satisfied.
Need to differentiate between food and snacks. As article says wheat and eggs price are down, they ARE food, that means food price is down. Pepsi is a snacks company
Did I read the same article as everyone else here talking about price controls?
Cause that isn't what I got from it; term negotiated and contracted prices aren't "price controls." The suggested fix here is industry standard practice in many other business-to-business markets where the buyer selects a seller based on not just on how much they are selling it for today, but how long or for how many units they will guarantee the price for. Which is what is being talked about. AKA food supplier negotiates a price and guarantees it for a year.
So, its not a bad plan. Forcing the supplier to manage their costs vs. just passing them on at will gives the supplier an economic interest in suppressing their own suppliers and increasing their delivery efficiency. It pushes some of the price risks away from the individual consumers, who don't have much individual purchasing power.
You're just moving the responsibility around. Someone has to be responsible for arbitraging risk/supply/demand over a long time period. It could be the buyer/intermediary or the supplier. Generally, regulation on how the market self-optimizes is not good, because it will be sub-optional and the market will try to optimize around your roadblock, which simply creates additional inefficiency.
Price controls don't work and have never worked. If the problem is gov't printing too much money, then gov't should stop printing money. If the problem is monopolists colluding, then gov't should go after the monopolists for colluding. The law of supply and demand is not going away
My utilities are pretty reliable, and they're all price controlled. My grocery store has milk in stock all the time, and it's because of price controls on milk.
Utilities are a special case—normal market competition isn't really possible, and reliability is more important than getting the lowest price. As for your store's milk, can you elaborate?
Price floors are not uncommon in US agriculture regulation, it prevents prices from falling too low and suppliers going out of business as a result. Milk is one of the common examples of this in the US.
Again, as you point out, it is another example of reliability being more important than free market pricing.
My point here is that "economists say prices control are bad" is an oversimplification. Importantly, economists know how price controls effect markets and sometimes they can be effective tools.
The US doesn't have a high food price problem so I got no idea where they're coming at this from. People only think food prices are high because the sticker price value jumped up because of inflation. The food didn't get more expensive, your dollars became worth less.
This is an example of where coming to the comments first saves you a click - this is just price controls packaged differently. Price controls not working is about as consensus a view as you can get in economics. In their example, you don't get cheaper Pepsi, you don't get Pepsi at all.
Hilariously, they mention price and wage controls during WWII as an example of it working! I think that's up for debate to put it mildly. One famous thing that came out of wage freezes at that time was health insurance provided by employers. Had to attract talent somehow and salaries were capped.
More broadly, I don't believe humans have the capacity to foresee second and third order effects of policies like these which is what makes them so dangerous.
> More broadly, I don't believe humans have the capacity to foresee second and third order effects of policies like these which is what makes them so dangerous.
I think they have the capacity. We have pretty strong evidence for that. But I do not think they have the will. So at least that would make it possible to solve, albeit easier said than done is quite the understatement. The distinction is important though.
This probably won't help, even if the US government were able to implement such a policy (spoiler: it isn't, unlike the French, which is competent at dirigisme). One thing that would help, and very quickly, is to end the boondoggle that is mandatory corn ethanol in gasoline. Turning food into low-quality fuel (to feed subsidies into Cargill and Archer Daniel Midland) makes food more expensive worldwide and hits the poorest, whether in Mexico or Egypt. A most immoral policy.
61 comments
[ 2.7 ms ] story [ 121 ms ] threadRepublicans would scream "less government is better" and block it like their lives depended on it.
If you don't like the price of your Pepsi, buy Coke. Or buy the store brand. Or do your health a favor and don't buy that garbage food in the first place.
A literally bankrupt company giving economic advice..
Incredible amounts of marginal farmland that comes in and out of production based on market prices.
(so, to be crystal clear, price caps are a horrible idea).
There's also farm regulation that manipulates farmland going in and out of production artificially. It already isn't driven solely by the free market.
Something does need to be done about that type of situation; in a properly working free market the competitor would gleefully accept having 100% of the market and waiting for the high price supplier to go bankrupt or lower their prices. Instead you're seeing what appears to be cartel-like 'we've got your back' from suppliers. This was most recently visible with eggs.
Relevant: https://cdn.mises.org/Forty%20Centuries%20of%20Wage%20and%20...
https://news.ycombinator.com/from?site=mises.org
You can post articles from Vice, Oxfam or even Jacobin Mag. Just don't share the canonical sources debunking socialist canards. Articles from laissez-faire economists eloquently describing the problem of economic calculation aren't valued here. HN prefers the pop-culture journalists at Vice Magazine to rehash the virtues of price controls.
https://en.wikipedia.org/wiki/Edict_on_Maximum_Prices
For example, one of the first items mentioned in the article is how prices are regulated in France, which is really not traditional price controls:
> France has set up a food pricing system that will sound foreign to American ears: Consumer goods companies like PepsiCo must negotiate with the country’s grocery stores on prices in the stores during a set period. If they can’t come to a compromise, PepsiCo won’t be able to get its products on the grocer’s shelves. The negotiations provide French consumers with a small but valuable piece of power, and President Emmanuel Macron has been trying to use the system to his advantage as he aggressively pushes to get the country’s high food prices down, saying they should reflect the fact that the prices of many raw materials have recently declined.
That's not really how people think of traditional price controls, it's just saying that prices must be negotiated once per year. Of course, what the article leaves out, and which is mentioned in the link at https://www.reuters.com/world/europe/french-bill-moves-food-..., is that only negotiating once per year means that if prices are set high in the beginning of the year, there is not a chance to reset lower until the following year. So consumers get the benefit of higher-stakes negotiating power, but you've got to live with that outcome for a year.
I also despise the "blame inflation on corporations just taking more profits" line of thinking, because it's usually made from as a braindead assertion without any follow up. That is, basic economics 101 says that competition should keep corporations from taking undo profits. So if corporations are able to drastically increase their profits without new competition coming in, it means that either (a) there is something about the market that is fundamentally broken, e.g. monopoly pricing power or collusion, or (b) the price increases really are warranted, and companies are worried about price pressures in the future. That is, so often I see the argument being made of "companies are gouging us for profits, we need price controls!" as opposed to "companies are gouging us for profits, what is broken in the system that is allowing this to happen in the first place?"
This is absolutely price controls, complete with their inevitable result: The non-availability of the good.
https://www.diamandis.com/hubfs/Diamandis_March_2017-Theme/I...
https://conscienhealth.org/wp-content/uploads/2020/02/2018-O...
Maybe olive oil prices have gone up and some others or lots of packaged and processed foods. But from a PRICE PER NUTRITION standpoint (real food like beef, eggs, etc), I dont find food costs all that bad.
Price per calories for junk processed foods like snacks and juices is a different argument I guess.
I will also add when times are tough you can quit spending money entirely on carbohydrates. Your body cant produce fats or proteins but It can produce all the glucose it needs endogenously. You can supply yourself fats and proteins your liver will take care of making glucose just fine.
Convenient junk food is quite expensive compared to “real food” like meat, uncooked pasta, fruits, vegetable, etc which are healthy but require some preparation.
The argument then goes: “well, ok, but poor people don’t have time to cook”. Which again rings false. The poor people I’ve known have an abundance of time and are not working 3-4 jobs to make ends meet.
And prep is easy, I guess my tastes are simple - beef, eggs, salt maybe a litle hot sauce. I can cook 3 pounds of ground beef and add about 10-12 eggs in a 12" fry pan and have 3-6 meals in containers in about 45 minutes.
I have some food allergies and cook everything from scratch at home so I know it can be cheap to cook yourself but there are some processed foods that are just cheap for the calories especially things on sale.
Other factors like limited transportation and space in a backpack or bag to carry home can make bulk savings harder.
Yeah you can eat rice and beans for cheap, but that’s not really a completely nutritious diet. I’ve eaten it a lot!
The additional flavor makes food seem more filling, and isn't expensive. Also: potatoes.
What about 5 years ago?
Unit prices have gone up for processed foods, core protein and vegetables considerably and, in many cases, the quality has decreased.
The prices pre- and post- pandemic are undeniably higher for staples. I used to pay $4.99/lb of ground beef at regular sticker prices at Trader Joes, Whole Foods, etc. back in 2019. Those same offerings are consistently $5.99+.
To some it's certainly a small increase, but I see similar impacts across other products as well, and it all adds up. For example, Kerrygold butter used to go for $5.99 and now regularly goes for $7.99. Almond Milk used to be $3.99 ($2.79 on sale), and now routinely goes for $5. Most Cold Brew products I purchase have gone from $5.99 to $6.99 or $7.99. And Cream Cheese is one of the worst - 2 bars of Philadelphia Cream Cheese used to be $6 and now regularly sell for $9 - $10.
It's everywhere. I'm in NYC / LA, so might be different elsewhere (I'm sure these prices look insane to most people outside of cities).
This is by definition not scalable, so your experience has nothing to do with the experience of typical families.
The most expensive beef I buy is prime top sirloin steaks at costco for $9-10/lb and ribeye roasts (that I cut up into steaks) at the local halaal market are $8/lb or less. Tenderloins for kebabs and filet mignon is $6-8/lb at Ranch 99 or Shun Fat. The most expensive chicken I get is Costco tenderloins for chicken tenders that sometimes rise to $7/lb but otherwise chicken breast is $3.5/lb or less. The oxtails and neckbone for good beef stock are more expensive than most of the meat I usually eat!
I suspect I'm just really privileged and don't know the meaning of a food desert. The number of ethnic grocery stores here in SoCal guarantees that it's easy to find a cheap source for every ingredient imaginable. The key is to shop there and not at the big names like Safeway, Vons, Ralphs, Albertsons, etc.
The only way to achieve reliably low prices is to allow deflation to happen, which means government gets out of the way of innovation, lowers regulatory barriers, and stops printing so much money.
If the USA withdrew from this, farmers would likely switch away from corn. Within a few years we could 10x meat production. Large open pastures producing grass fed meats would be a far better choice.
Isn't most corn fed to animals in factory farms?
Grass fed all the way.
First, you can't convert all current farm plots owned by independent farmers into contiguous grazing land, and second, animals need tons of vegetable nutrition. Lots of that corn is already diverted to animal feed - grasslands aren't going to be more productive for animal calories than engineered corn. That's why we actually need to be decreasing meat production - it's incredibly wasteful.
If you believe we could 10x meat production by replacing corn (which... we can't), we could just 200x vegetable production instead. Obviously that makes no sense to replace vegetables with vegetables on the same land and get orders of magnitude more crops.
The conclusions you should be drawing is that we should stop subsidizing corn for HFCS as an unhealthy high-calorie filler and instead subsidize nutritious vegetables like legumes.
I realize there are many people who want to reduce meat production.
I absolutely am optimistic about a tiny footprint synthetic meat production that competes with top quality steaks.
But until that exists, we should be increasing meat production of all kinds.
Oh and farmers pass on your new high taxes in shape of food inflation. Pretty big protests going on across europe right now.
Wow, way to switch from one environmental disaster to another, even bigger one.
The vast majority of cows are already pasture raised in the US. Those feedlots with packed pens serving tons of corn feed that most people think of when they think of factory farming is only the last step of the process called finishing that improves the fattiness and flavor of the meat for human consumption.
The corn that's used for bioethanol is actually later fed to cows at those feedlots as distillers grains [1]. It accounts for a significant fraction of animal feed so eliminating bioethanol would make beef more expensive, not cheaper.
[1] https://en.wikipedia.org/wiki/Distillers_grains
Cause that isn't what I got from it; term negotiated and contracted prices aren't "price controls." The suggested fix here is industry standard practice in many other business-to-business markets where the buyer selects a seller based on not just on how much they are selling it for today, but how long or for how many units they will guarantee the price for. Which is what is being talked about. AKA food supplier negotiates a price and guarantees it for a year.
So, its not a bad plan. Forcing the supplier to manage their costs vs. just passing them on at will gives the supplier an economic interest in suppressing their own suppliers and increasing their delivery efficiency. It pushes some of the price risks away from the individual consumers, who don't have much individual purchasing power.
Historically, that doesn't work out so well.
e.g.: https://www.maine.gov/dacf/milkcommission/minimum.shtml
Again, as you point out, it is another example of reliability being more important than free market pricing.
My point here is that "economists say prices control are bad" is an oversimplification. Importantly, economists know how price controls effect markets and sometimes they can be effective tools.
Hilariously, they mention price and wage controls during WWII as an example of it working! I think that's up for debate to put it mildly. One famous thing that came out of wage freezes at that time was health insurance provided by employers. Had to attract talent somehow and salaries were capped.
More broadly, I don't believe humans have the capacity to foresee second and third order effects of policies like these which is what makes them so dangerous.
I think they have the capacity. We have pretty strong evidence for that. But I do not think they have the will. So at least that would make it possible to solve, albeit easier said than done is quite the understatement. The distinction is important though.