October 2022, Volume 28, Number 4
The price of wheat, which was less than $8 a bushel before Russia invaded Ukraine in February 2022, jumped over 50 percent to over $12 a bushel in March and again in May 2022, and then returned to $8 a bushel in July-August 2022 as Ukraine resumed wheat exports. Wheat and other grain prices are expected to remain higher than historical averages because of high energy and fertilizer costs.
World food supplies are sufficient to provide each of the world’s eight billion people with 3,000 calories, 85 grams of protein, and 90 grams of fat a day, more than enough for human metabolic needs. However, poverty and food loss and waste mean that three billion people are food insecure, and more people may become food insecure due to rising food prices that hurt those who spend a higher share of their incomes on food.
A global index of food prices jumped almost 20 percent between January and March 2022; Russia invaded Ukraine February 24, 2022. Only a quarter of the world’s food by value crosses national borders. This trade in food helps to stabilize prices by smoothing demand and supply in areas affected by weather and disease events.
The UN requested $46 billion for emergency food assistance in 2022; countries pledged to provide a third of this amount. Advocates for more food aid warned that failure to feed people could lead to more migration, which could be more costly for rich countries.
Critics of the current food system note that the demand for grains and oil seeds to feed animals raised for meat and to make biofuel have increased much faster than the demand for food. Governments could free up grains and oil seeds for people by encouraging consumers to eat less meat and reducing ethanol mandates.
The price of Arabica coffee beans doubled from $1 a pound in mid-2020 to $2 a pound in mid-2022 due to drought and frost in Brazil, the world’s largest exporter. Instead of the 50 million 132-pound bags expected between July 2022 and June 2023, Brazil’s harvest may be only 35 million bags. About half of Brazil’s Arabica coffee is from Minas Gerais.
The cocoa industry employs six million people in Ivory Coast, including a million farmers who grow and harvest cocoa beans that are usually exported raw; Ivory Coast produces 45 percent of the world’s cocoa beans. With the support of NGOs, some cocoa producers are roasting and grinding cocoa beans to make chocolate in a bid to create more jobs that pay more than the country’s $100 monthly minimum wage.
Cocoa pods are harvested in the spring and fall and the white pulpy beans are extracted and dried, turning them brown. Farmers receive $0.60 to $0.70 per pound for their dried beans.
US. Three fourths of Americans adults are obese based on the body mass index. The White House Conference on Hunger, Nutrition and Health in September 2022 released a five-point plan to make healthy food more affordable and accessible and to invest in expanding physical-activity options and enhancing research on food and nutrition. Biden also promised to reduce food waste; a third of US food is not eaten.
American adults get over half of their calories from ultra-processed foods, defined as everything from breakfast cereals to sweetened yogurts; adults in Europe get a third of their calories from similar foods. Ultra-processed foods often include salt, sugar, and fat, making them addictive in some people and leading many adults to consume extra calories.
Rising food prices changed consumer behavior in summer 2022, with more people switching from national to cheaper store brands such as Kroger’s Simple Truth, Whole Foods Market’s 365 or Costco's Kirkland. TreeHouse Foods, the largest private-brand food manufacturer, notes that store brands are 20 percent to 30 percent cheaper than national brands from Campbell’s, Mondelez or Kellogg.
Self-checkout is spreading in grocery stores aiming to reduce costs and minimize interactions. The Food Industry Association reported that 96 percent of grocery stores with at least 50,000 square feet offered self-checkout in summer 2022. The machines cost $15,000 to $30,000, and usually require one employee per five machines.
An E. coli outbreak was linked to romaine lettuce served by Wendy’s in August 2022 in midwestern states. E. coli bacteria can lead to cramps, diarrhea and vomiting after three to four days, and usually recover within a week.
Wine. Americans drank more alcohol during the pandemic, leading to over 140,000 deaths linked to drinking and raising questions about whether alcohol taxes should be raised. Studies show that raising taxes on tobacco reduced smoking, and many advocates want alcohol taxes raised to discourage especially young people from excessive drinking. Oregon, which has no state sales tax, defeated a proposal for a $0.21 increase in the tax on a 12 -ounce beer and a $0.40 increase on a five ounce glass of wine.
Fred Franzia, CEO of Bronco and best known for creating affordable wines such as Two-Buck Chuck, died in September 2022. The price of the 2.7 pounds of grapes needed to make a bottle of wine costs less than $1 in California. Franzia asserted that no wine should cost more than $10 a bottle, suggesting that more expensive wines were efforts to get consumers to pay more than necessary for wine.
Bronco is the seventh largest US winery, producing about nine million cases a year; the Wine Group sells Franzia boxed wine. In 2008, a 17-year-old pregnant employee of a farm labor contractor died while working in a vineyard owned by a Bronco subsidiary.
EU vineyards averaged 1.4 hectares or 3.5 acres, and ranged from an average 11 hectares in France to less than 0.5 hectares in Greece and Romania. Italian and Spanish vineyards are on average two hectares or five acres. By comparison, California vineyards average 30 hectares and Washington state 22 hectares.
Bordeaux is producing too much wine. Some 4.7 million hectoliters were sold in 2018 and 3.9 million in 2020. In 2005, some 10,000 hectares of wine grapes were removed to reduce the supply of wine, and there are proposals to reduce wine grape acreage again at a cost of about E2,000 per hectare.