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Date: 2025-03-13 Page is: DBtxt003.php txt00026737

COMMENTARY THE COFFEE KLATCH ... April 13, 2024 with Robert Reich and Heather Lofthouse plus Michael Pollan Why are food prices out of control? PLAY YOUTUBE VIDEO Original article: https://www.youtube.com/watch?v=2Y-Qu0a0MZA Peter Burgess COMMENTARY The answer to the question of 'WHY' food prices are out of control is pretty obvious. In most of America the 'market' is dominated by a few big monopolistic ... actually oligopolistic ... big corporations. These companies 'set the prices' at the wholesale level and the 'end customer' pays that price plus the retail mark-up in order to get the product. The end customer has the choice of paying the price and having the product or not paying the price and not having the product. A modern US supermarket is anything but a market. I have been interested in 'markets' since I was an economics student at Cambridge in 1960. I learned the basics as a student, but learned a lot more about business and markets in the real world by involvement in real-world situations in the USA and around the world over several decades. Too many observers and commentators on markets fail to be clear about their data, often confusing 'cost' and 'price' in their analysis ... and ignoring the role that 'profit' has in their analysis! There are many products where the production cost has declined over time while the price has increased over the same time. Internally, a company may be very pleased with this state of affairs while the customer will be unhappy. In almost all cases a customer has no choice and has to pay the price or go without. During the recent past, a lot of products heve been sold at prices that are high because of the embedded 'profit' in the price. This is rarely the subject of analysis in the news media. US law is meant to stop competitors colluding over prices ... but competitors are allowed to compare prices and act on that information. Though customers in the USA are unhappy with prices ... it appears that investors are very pleased with company profits and the resultant high stock prices. Record stock prices have been achieved in New York for most of the last three years! Taking a longer perspectve, it becomes clear that in the 40+ years since President Reagan there has been a focus on company profits and stock prices which have been the top business metrics. Important social and environmental business performance metrics have been by comparison quite inconsequential. This should be a cause for alarm ... but is not. Rather social and environmental issues seem to be of less importance now than in decades past ... which is plain stupid. Why am I not surprised? Peter Burgess
Why are food prices out of control? \| The Coffee Klatch with Robert Reich ft. Michael Pollan Robert Reich 648K subscribers ... 212,649 views ... 9K likes Premiered Apr 13, 2024 The Coffee Klatch with Robert Reich Today we have a special guest to help us understand why food prices continue to go through the roof — Michael Pollan. Pollan is author of The Omnivore’s Dilemma, How to Change Your Mind, The Botany of Desire, and other books. He and Eric Schlosser (whose new piece in The Atlantic, “Do We Really Want a Food Cartel?” is also a must-read), are just out with a new documentary, Food Inc. 2, which explains how giant corporations have taken over what we eat. We’ve asked Michael to tell us what steps we can take — as consumers and citizens — to take back our own nutrition. Transcript 0:00 and it is the Saturday coffee clutch with Heather loft house and yours truly and today a special guest because you know this past week the Consumer Price Index came out out and everybody is kind of everybody I talk with is worried about inflation or at least um still the the kind of tenacity of inflation especially with regard to grocery prices and so we are so delighted to have as a special guest today as somebody who knows more about not only grocery prices but groceries and food and nutrition than anybody else maybe in the world Michael pollen let me introduce Michael very very quickly Michael you probably all know is the author of The omnivores dilemma how to change your mind the botony of Desire many other books Michael I love your books and uh and also he and Eric schlasser just are just out with a new documentary uh called 0:59 food Inc 2 uh which explains how giant corporations have taken over what we eat let's get into it Michael welcome what is the story thanks Bob thanks Heather yeah what is the story with food and prices well I think what we're seeing is the result of a uh insufficiently competitive Marketplace um you know in the last several years the food industry has been Consolidated we saw this during the pandemic when the food system essentially fell apart and one of the reasons is they're too few players and uh and especially in the grocery area and although the Biden Administration has stopped one very important and would have been disastrous merger of Kroger and Albertson which represents basically every you know you don't know them by that name but those companies own virtually every supermarket chain you've ever visited um but 2:00 what's the incentive to bring down your prices if you're in a a monopoly or an oligopoly situation uh there's no one trying to undercut you um so I think that's one of the reasons prices have not subsided uh you know during the during the pandemic it was supply chain disruptions um that helped drive up prices but the persistence I think owes to the lack of competition in this Marketplace Michael is it competition a a problem not only in the grocery uh Lack of competition kind of retail area but how much of it is a competition in terms of food processors uh and uh and all the way back even to to the seed corn uh that farmers get and yeah and the you know the ranchers deal with this uh people raising chickens and pigs deal with this what happens is see I think we I think we've developed a very narrow understanding of the purpose of antitrust uh generally we we've been taught to think of it as a matter of consumers uh you know are hurt when 3:04 companies combined and that is true but so are producers so right now if you're let's say you're raising cattle in you know I don't know in Veil South Dakota some corner of South Dakota um there are only four companies buying 86% of the cattle in this country and they've pretty much divided up the country regionally so you may only have one person to sell to and you know what happens when that's the case you have to essentially take the price they're offering and so many farmers have become price takers and this is true if you're bu if you're raising corn or soybeans um you you you can't negotiate these are kind of set prices and they're set by Carill and ADM and these giant companies um so it's it's really a dysfunctional Marketplace and if you go back to the history of antitrust it was very much about out producers and 4:01 protecting them from uh from uh companies that were you know essentially uh destroying their Marketplace the word consumer doesn't even appear in the Sharon antitrust Sherman Antitrust Act uh the focus was very much on producers and the third factor which I think is perhaps the most important is do you want these concentration of powers in your politics um do you want to have so much power power in a company like Tyson for example which is the largest meat packer in this country that during the pandemic they could actually Force the hand of the president uh this is Trump and get him to sign an executive order invoking the defense production act to reopen their lines after the public local public health authorities had deemed them uh vectors of Co into their Community that's a that's a company that's got way too much power the defense uction Act is designed to get companies to do things they don't want 5:03 to do uh like you know a car manufacturer being forced to make tanks or airplanes for a war effort that's that's why we have it but in this case it was invoked to allow Tyson to do exactly what they wanted to do which was open their production lines Michael you know antitrust is something that uh I Antitrust used to spend a lot of time in and with I know I can't believe I'm uh I'm telling you about it this is this is very important but my point is that before Robert Bourke uh became as dominant a force in conservative circles as he did anti trust was still being enforced uh but after Robert bork's ideology uh was was accepted by the Reagan Administration it became the dominant Force even during Democratic administrations I mean it's not just Trump and Geor W uh it's also 6:01 Bill Clinton and Barack Obama uh and uh and but but Biden marks a a real difference in terms of going after some of these you mentioned Kroger and Tyson Kroger and Albertson but I I think the Biden Administration is really uh trying to revive antitrust the question is whether it's too late yeah well that is the question so the the change you're talking about that was uh engineered by or the ideology was Robert Bor was only a memo in the Justice Department there was never a change in law and it was any Democratic president could have simply discarded it or written a new memo on the standards for antitrust Biden is the first president to do that he has actually discarded uh that standard and invoked a new one and that's a huge deal and he deserves a lot of credit for it um because yes it's not easy he is up against some very powerful forces uh we we've lost the habit of enforcing 7:02 Politics and antitrust antitrust in this country and part of it isn't part of it the judges I mean the Judiciary uh which is now I mean George W bush uh and uh some of his some of his allies really did change uh the court system and a lot of the judges don't really appreciate the points you made that antitrust is not about consumer or at least solely about consumer welfare it's about politics and it's also about uh sort of the uh you know the producers the ultimate you know the people that were out there small and I don't think they've they've figured out how to message this yet correctly I mean there's still talk I mean I was looking at the Apple suit which you know was filed a couple weeks ago and they still talk mostly about the produ about the consumer and choice for the consumer which is again important but in the case of Apple it's these producers these people making apps and and other forms of software that can't you know are 8:02 forced to go through the Apple Store and pay this you know exorbitant 30% tax on whatever income they make so I think they the administration is doing some very important work but they need to learn how to talk about it yeah well they have to take a page from Teddy Price gouging Roosevelt right and um uh and and and develop a a kind of a Grassroots support for these efforts which which doesn't yet exist and that's that's always risky yeah so first of all thank you for bringing your coffee today I see your espresso cup and we have to say that only four companies are responsible for 50% of coffee in the US while we're talking about food monopolies which is incredible um I think it's important to note too that for a while and you mentioned the pandemic Michael and how this idea of price gouging um has evolved over time but this was kind of Fringe for a while when we Bob other people were saying hello Corporation 9:00 but now last month the FTC came out with a big report that says expansion to profits is driving this inflation it is the profit margin it's not somewhere down the supply chain it is an active choice and so there is and the mainstream media wasn't talking about this it's getting a little more traction but it's taken a long time right speaking of messaging yeah and uh you know I think you'll be hearing more about it from the administration as we move into campaign season um but think they've got a legit case to make um that this is price gouging and um and you know it makes a difference if they jaw bone about it it could and I think they should and and even if it doesn't people will understand and stop blaming the Biden Administration for this uh for something that they didn't CA that's it one other thing I saw just yesterday horel 11 million bucks it has to pay in a class action suit for allegedly price gouging just yesterday another one you know that's interesting Heather I I didn't I did not see that but I I was also 10:04 Corporate agriculture interested in Michael's point about consumerism kind of pushing out even in the messaging of the Biden Administration uh who we are as Citizens uh and also pushing out the producers I I mean you know if you look at the agriculture sector of this economy uh it used to be that most people in America the turn of the last century were involved in agriculture now small farmers are are obviously much much smaller but still we have a place in our hearts for small farmers and family farms uh but it's all kind of corporate agriculture Now isn't it yeah I mean you know as prices have been forced down by the buyers of these agricultural Commodities the the business strategy of the farmer is get bigger it's the only way you know Farmers think in terms of cash flow not profits they often make no profits they often uh supplement their income off Farm um and most of the farmers I know in the midwest have another job basically but they have to 11:04 buy up the land or rent the land from their neighbors and they get bigger and bigger and this Hollows out Rural America and this is part of the anger that is emanating from rural America John tester in food Inc talks about this you know that his town you know used to have uh four hardware stores now it has one used to have three bars now it has one um and it's just and I remember when I was reporting from Iowa that it took something like six high schools to field six re you know Town high schools to field a single football team right um there's nobody home and there's a lot of anger about this and I think some of it though has fallen on the Democrats because during the Obama Administration at the beginning he made a lot of noise about antitrust in a and he sent his attorney general and his secretary of agriculture out having a listening tour farmers stood up in public and talked 12:01 about how they were being um essentially exploited by this or that company whether it was the seed industry or buying cattle or pigs uh and then after the the midterm that first midterm where he got shellacked as he famously said and was accused of being anti- business he simply dropped the antitrust initiative and we heard nothing more for six years remember Obama won Iowa twice Obama vs Trump 12:25 that is just inconceivable today totally win Iowa but that's one of the reasons I think I think he he raised expectations and then dashed them well you know the question there interestingly is why I mean in 2015 uh I don't know if you and I have ever talked about this Michael I was out uh in Missouri talking to Farmers uh doing a kind of free floating focus group some research I was doing and I asked them this was 2015 this was when Hillary Clinton and Jeb Bush were the putative Front Runners for their parties uh and I asked these Farmers uh you know who are you really interested in or who might you be interested in for president 13:06 and many of them said uh well there are two people we're interested in one is uh named Bernie Sanders and the other is Donald Trump and I kept kept saying what I mean these are two people who are on the opposite extremes of America but what these farmers and I kept on hearing it from actually more and more people uh in the farm belt and in even even uh the Rust Belt more and more people kept on saying well we want a a a fundamental change because the game is rigged against us and that's what I that's the issue and it still is it's really rigged against them and that's one of the themes of this film and John tester speaks to it you know he's a real Crusader for Anti-Trust enforcement and you know he's up for re-election and in a state where I think Trump won by 40% but he but he has a shot um I mean he's very popular and um he was 14:01 Fast Food Workers fantastic in the film as was Cory Booker who was in it and you all what I think it's so beautiful and it's right now it's on demand we can all be watching it again is this the showing of what you're saying right now right so we get all these stories they're beautiful Motion Graphics and there're these people like Fran Maran is one of the fast food workers one of these Farmers one of the people on the front line who are being impacted by these big corporations and it really is glorious story ING with real people um well you know Fran the story of Fran is incredibly moving and she's an really eloquent spokesman for all the people who are feeding us at fast food Outlets who are um you know have an average wage of like $15,000 a year um who many of whom are on public assistance so you know what does that mean that means your tax dollars are going to subsidize McDonald's and Walmart because they can't pay they don't pay their employees a living wage so they need they need to be on food snaps food 15:04 stamps they need to be on you know all sorts of for whatever forms of public uh you know Medicaid and everything um you know we're going to see a very interesting experiment in California which is just uh uh put in place a $20 minimum wage um fast TR for fast food California Minimum Wage fast food workers and you know it may it may help people remember again the old fordist idea that if you pay your workers well they'll buy more of your products um so there there's they're kicking and screaming about this but we'll see how it actually pans out but you know the workers of these companies too are having their wages forced down by concentration because you don't have a lot of choices if you if you work in that industry you know you're going to get the same pay at McDonald's as you're going to get at Wendy's right so Michael where is all the money going that is we have uh you know fast food workers and 16:02 Farm Workers and small farmers uh and consumers all paying more and getting less so there are bigger and bigger profits and who gets the profits where are the profits in agriculture in food in our entire food chain where are they ending up well I assume a lot of them are going to shareholders in these companies a lot of the companies are public but not all of them uh cargo is a private company uh the biggest in the world um so we don't know exactly what's happening to those profits but they are making record profits there's no question and um so it goes to and it also goes to their um their Executives you know who make um uh Eric schlasser did some calculations and for u a fast food worker to make as much as the president of McDonald's you know 15,000 he makes 15,000 I think every minute or every 10 minutes I forget exactly the figure but I mean the disparity we've never had disparities like this um so 17:07 that's where a lot of it's going um the executives are paying themselves handsome salaries and the and the stockholders are doing pretty well too yeah executive pay uh in 19 in the Executive Pay 1960s was 20 times the typical worker in America now it's 350 times the typical worker in America uh but it's also the shareholders you know we that we have a delusion that somehow many Americans have shares of stock directly or indirectly uh but if you look at the data you see that the richest 1% have about 52% of all shares of stock uh in the United States the richest 10% have 93% of all shares of stock uh in terms of value uh so the the Richer the shareholders get uh the the more lopsided the AL ation of income and 18:00 ultimately wealth becomes uh but Michael let me let me get back to workers for a second because I take it that as you see more and more concentration uh in this in the food sector or in America a lot of workers have less choice of whom to work for so that they are like any other producers they are being shafted by A system that makes it more harder for them to uh achieve upward Mobility yeah no they're in the same boat as uh all the they're producers themselves as Competition you suggest and they they too have lost that ability to sell their time in a competitive Marketplace uh and you know this is what capitalism is supposed to be about competition but it turns out corporations hate competition and and and anything they can do to stop it they will do and that's why we have Anti-Trust laws so this reminds me too of a quote you said in the movie fooding Environment to which was the logic of capitalism and the logic of nature are at War so we've talked about how Monopoly power is taking away from our freedoms our being consumers workers but what about the environment can you talk a little bit about that we haven't talked about it yeah well you know as you move toward consolidation you have I mentioned farms getting bigger and bigger feed Lots getting bigger and bigger they feed Lots now with a 100,000 head of cattle um this is the equivalent of a city of several million people in terms of the amount of waste that's produced but unlike cities that under the Clean Water Act are forced to clean up their waste feed lots are exempt they can just leave it in big lagoons or spray it on the earth or whatever they want to do they're enormous sources of of water pollution and air pollution Iowa now has the second highest cancer rates in the US that's a new thing and that Co inides with the rise of these um uh pig feed 20:01 Lots uh indoor Pig agriculture um and also nitrates in the water um most people in Iowa are drinking water that's been polluted by agricultural chemicals and the result is very high rates of cancer so you know the politics that we're seeing makes more sense when you realize how many people feel as Bob said earlier that the game is rigged against them because it is that's not an inaccurate uh perception um the environmental costs of Agriculture are enormous about a third of greenhouse gases can be traced to the to the entire food system um it happens at every level um but the the most important level in my view is one we don't talk about very much which is the excess use of nitrogen fertilizer on our corn fields you know corn is the Great American crop we grow more of it than anything else we grow so much of it we can't get rid of it fast enough so we feed it to our cars in the form of ethanol which offers no 21:02 environmental benefit um and then we you know process the hell out of it to create these ultr processed foods that are very profitable um but what happens with nitrogen fertilizer is farmers put on by by most estimates twice as much as they need or as their plants need and they they if you ask a farmer they say well it's crop insurance um they put on more and that'll guarantee that they get maximum yield out of their corn fields the problem is that any nitrogen that's not taken up by the plant gets wet when it rains and turns into nitrous oxide which is a very serious greenhouse gas comparable to methane um so that's uh when when Walmart did a life cycle assessment of its carbon footprint trying to figure out how they could limit their uh greenhouse gas production you know you would have thought it was their Big Box Storage that are air conditioned and heated or their Global Supply Chain in fact the biggest contributor from W of Walmarts to 22:06 greenhouse gas production was the nitrogen spread on the corn plants at the base of their food chain wow that grows all the high fruit GH corn syrup and the feed for the meat and um so there's a lot that could be done to mitigate the uh the carbon footprint of Agriculture but we're not doing much of it and one other note on that is it is highly subsidized by the government corn right yes it is we um we we encourage Farmers to grow maximum amounts of corn and soybeans we ensure them so that even if they plant it in regions where it doesn't do well where there's not enough rain we'll cover it if it if their crop fails but yes um we heavily subsidize corn and soy production because it is at the base of the food system we do not subsidize what the USDA calls specialty crops which is their euphemism for actual food that you can eat um and uh 23:05 we do very little for those crops and of course that's exactly what Americans should be eating more of um our our agricultural policies are not organized around maximizing health or the health of the environment they're it's just about lowering food prices by overproduction Michael a lot of people who are watching this or listening to Solutions this uh podcast are always saying to themselves well what what's the way out of this I mean if if I mean you said that Walmart had done an assessment of its environmental impacts and public health impacts uh we've talked about the concentration of Industry Walmart is is a good example well what's who is taking action other than antitrust the Biden Administration is doing a little bit uh but what's the answer here what can the average person do about the uh big agriculture and and all of the problems that are flowing right now from Big agriculture 24:03 well there's a lot I think that the average consumer who is acting as a citizen and and because those two identities can be joined um and that we have seen and this is one of the more hopeful uh dimensions of the food issue that I've been involved with for so many uh years is that consumers can vote with their forks and they can they can opt out of the industrial food system they can buy local produce they can buy local meat um you know I think not patronizing feed Lots is a good start um both for your health and for the health of the um the animals and um and the producers um so that's one thing the other thing though that I think is encouraging is that there are now some powerful people in Congress who get this who have connected the dots around the food system and its impact on our health and and the and the health of the environment uh the two we feature in the film are are John tester who needs help 25:04 with his reelection um who's a key player in driving um support for antitrust enforcement and Corey Booker um his decision to use his political Capital to get uh get himself on the agriculture committee is very important we need more people on the ad committees who represent e ERS not big farm State uh legislators which is basically you know it's been a Backwater for anyone from a city um since the 60s and Corey Booker like gets it that the health of his constituents he doesn't come from a big farm State although there's some you know perfectly nice tomato farms in uh in New Jersey um but he gets that the health of his constituents and we haven't talked about public health very much but you know we have 40% obesity in this country we have um outrageous rates of diabetes um and this is all connected to 26:04 the diet I don't know that people realize but the leading cause of death in America is no longer smoking it's it's diseases linked to diet and Booker gets this so so one thing to do is to support the legislators who get it um and there are people in the house and people in the Senate who finally do um and the other thing is you know I'm optimistic that in a second Biden Administration um the gloves will be off in terms of antitrust um from from rear lips to God ears let's hope I am an optimist I mean they're really up against it and um one of the things you learn when you go to Washington and I'm sure Bob you observed this yourself and I just did this week because we had this Premiere in Washington for the film is that all the politicians look to us for support that they can't do it on their own they're they're up against very powerful Corp corporate interests and they need to hear from the Grassroots uh they need that protection and I heard 27:04 this from people at the FDA I heard it from people at the White House and I heard it from Booker and tester um so citizen action on these questions is is really important so you need to vote with your votes and vote with your forks well Michael on that upbeat note uh I'm going to tell people they can U not only see the film uh it's on Demand right now uh but we're going to to play a clip of your film thank you so much Michael pollen for joining us everybody out there uh cups up uh eat well sleep well have a great week thanks Michael thank you Bob thank you heather over the last two decades something called the food movement got started but the food industry is dominated by a handful of very powerful companies so there's a lot at stake when 28:02 you sit down to eat when the pandemic hit the curtain was peeled back there were whole crops being buried at the same time there were shortages in the supermarket but that's not the only problem working in the fields our work is essential but we as people were treated as exposable how could I go to work for these billion doll companies and feed all these people all to come home home to hear my son's stomach grow by fixing our food system we will create health and well-being in every aspect of our lives and I want Rural America to be vibrant again that's my motivation here they're going to say we're not going to let some big mouth senator from Montana stop us and so bring it on guys every one of our oysters filters 50 gallons of water a day and our kelp soaks up five times more carbon than landbased plants this is solar power electrically driven on a programmable basis you're dealing with a crowd that does not like 29:04 change when you walk into a supermarket there's a whole arsenal of additives designed to mislead the brain actually interfering with the brains and the body's ability to metabolize food I sure as heck don't want my tax dollars subsidizing the things that are making people sick now what are the proteins that you're producing that's something we we can't talk about on camera right now I wanted to wake up in the morning believe in what I was doing this is wealth right here programs like ours demonstrate the kind of policy change that we want to see this is our chance to chart a new course I want to see people living life not just fighting to survive just imagine if the government decided to step in on the side of the consumer and the citizen we not only can do it we have to [Music]

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