OPINION:
The Democratic Party wants to run your supermarket. In a speech Friday, the Democrats’ standard-bearer, Vice President Kamala Harris, proclaimed her intention of setting grocery prices if she winds up running the show come Jan. 20.
“A loaf of bread costs 50% more today than it did before the pandemic. Ground beef is up almost 50%,” she said, blaming “big food companies” for the pain felt at the checkout counter. Her remedy is to have Uncle Sam decide how much a box of cornflakes is worth. “I will work to pass the first-ever federal ban on price gouging on food,” the Democratic nominee said.
Like all progressive policies, price controls are an emotional appeal intended to shift blame for rising costs away from the government’s inflation-inducing policies and to vague “big business” villains.
Having cast the tiebreaking vote for the Inflation Reduction Act, Ms. Harris bears direct responsibility for the budget-busting spending spree that sent inflation spiraling out of control.
America’s food producers shouldn’t be portrayed as villains, because what they offer society is nothing short of a miracle. Consumers can walk into any grocery store at any time of year and find shelves overflowing with fresh produce — regardless of the season. That doesn’t happen by accident.
A massive logistics infrastructure imports products from abroad to ensure that fresh produce is available even in the dead of winter. The process is reversed, exporting produce grown on our shores where they are needed.
Running a multinational growing enterprise is incredibly complex and expensive, and that’s why there has been some consolidation. Keeping prices as low as possible — without sacrificing quality — requires investing billions of dollars annually in research and development to come up with the highest-yielding varieties of asparagus, lettuce, tomatoes, wheat and so on.
A small operation can’t possibly invest on the scale needed to develop the technologies and techniques that made the United States the world leader in agriculture.
When President Donald Trump left the Oval Office, it cost $337 to plant an acre of corn. Under President Biden and Ms. Harris, it’s $448 — a 32% jump. As the Department of Agriculture stated, “seed costs, labor, machinery and equipment, taxes, and insurance are expected to increase.”
The cost of farm labor went up 4.4% to match the rate of inflation, and the tax and regulatory burdens skyrocketed under Biden-Harris policies. The same is true of every ingredient that goes into making bread, which is why each loaf costs more today.
When the cost of growing corn, barley and other grains goes up, so does the cost of beef, as these feed ingredients represent the single largest expense for cattle ranchers. The USDA noted a 16% rise in feed costs contributed to the rising cost of steaks and hamburgers.
The dumbest aspect of the “price gouging” claim is that the stores at the end of the supply chain operate on the thinnest margins of any major industry. As the Food Marketing Institute calculated, the average grocer realized a 1.6% profit after taxes last year. If costs for grocers go up, they have no choice but to pass the increase on to consumers if they intend to stay in business.
Set the price of cornflakes in Washington, and the supermarket shelves will quickly empty. There’s no point in selling a box of cereal at a loss, which is the lesson of every communist regime. It’s a lesson Ms. Harris apparently never learned.
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