Despite the attention the cost of food is getting in the presidential campaign, “food prices are not going to decrease,” said Aaron Smith, a University of California professor of agricultural and resource economics, in a blog on Thursday. “In a healthy economy, the prices of individual products go up and down, but the general price level only goes up. Overall, food prices follow the same trends as general prices.”
Among the reasons, Smith wrote, is that food prices are affected by the costs of processing, distribution, and marketing. “The more processed a product, the more it will follow the general upward trend of prices in the economy and the less it will be affected by raw commodity prices.” On the blog, Ag Data News, Smith included charts showing the long-term increase in bread prices and the upward climb of food prices alongside the general increase in prices in the United States.
“During and after bouts of high inflation like we have experienced recently, wages will increase to catch up with prices,” said Smith. “Your purchasing power returns through increasing wages, not decreasing prices.”
Earlier this week, former president Donald Trump said one way to bring down food prices would be to restrict food imports. “We allow a lot of food product into our country. We’re going to have to be a little like other countries, we’re not going to allow so much … we’re going to let our farmers go to work,” he said. Trump said increased domestic energy production and lower interest rates would help.
Democratic nominee Kamala Harris has said she would seek “the first-ever federal ban on price gouging on food” and at the same time help the food industry become more competitive. “My plan will include new penalties for opportunistic companies that exploit crises and break the rules, and we will support smaller food companies that are trying to play by the rules and get ahead,” she said in mid-August.
The food price inflation rate peaked at 11.4 percent in August 2022 before dropping steadily. It has been 2.1 or 2.2 percent for the past seven months.