Not too often do you find people complaining about prices being too low. Gas costs a lot more than it did a few years ago. Incomes are flat while the cost of all goods keeps climbing. Food is not different. The corn shortage creates havoc for livestock. Nowhere is anyone complaining about food prices being too low. But maybe we should be.

A food industry leader certainly thinks it’s too cheap:

 Jan Kees Vis, the global director for sustainable sourcing development at Unilever, the world’s second-biggest consumer goods company, said that food has become “too cheap” in the developed world, spurring increased consumer waste.
Half of the food that is purchased in the city of London is never eaten, the executive told a conference.

And he’s right there. We live in a time where meals come with food you aren’t supposed to even eat. We call them garnishes, but it’s really waste. Many restaurant meals are also served with something you don’t want. I don’t like tomatoes, (love all tomato based food, just not the actual fruit), but they come on sandwiches and salads. When I remember, I ask for them to be removed but that isn’t even always an option. So unless someone at my table wants my tomatoes, they go in the trash. But is Vis really right about the cost of food? Let’s go to the charts:

This is a chart of the CPI for foods and the CPI for all goods except food and energy (energy is volatile). Throughout the modern era, they’ve pretty much been in lock step. Which means compared to the prices of other goods and services, the cost of food has stayed pretty much the same. So if food is cheap now, it was also cheap 50 years ago.

But let’s go further than the modern era. Think back through human history. Our ancestors followed their food around. Once we figured out farming we were able to set down roots. In both instances, our primary job was to create food. As we’ve progressed through time, slowly we had to stop thinking about creating food. We were able to let others do it for us. As a result, the percentage of our labor that went towards food dropped dramatically. Say today you make $100 a day. You can comfortably live off $20 for food. You could easily survive on $5. That includes the waste.

If food were more expensive, it would cost you even more to continue what you’re doing. Or, you could pay the same price and buy less food. I’m as guilty as anyone else with letting food go bad or never eating it. If it cost more I’d probably be more careful. Likewise with restaurants. It’s well accepted they serve to much food. Cutting back on portions would be a good thing.

It’s certainly not wise to ask anyone to raise the price on food just so we’re more efficient with it. But subsidizing the cost of food isn’t helping the matter. Subsidies have also made it cheaper for calorie rich but non nutritious foods to become to easy choice. Fresh produce costs more. So before we get to raising the price of food, maybe we should let the price of things like corn (and thus beef, etc) rise. Once we have some kind of equilibrium we can see how much waste is still there.

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categories: personal finance, science