The persistent drama of food prices: History, weather, and the market’s unpredictable forces

“ The farmer's income was ruled by the wheat-crop within his own horizon, and the wheat-crop by the weather. Thus in person, he became a sort of flesh-barometer, with feelers always directed to the sky and wind around him. ”

“ The same truth holds good of every business: it must yield repayment of all cost of manufacturing, and reward the manufacturer with the necessary profit, or it will cease to exist. But agricultural price encounters two serious embarrassments not to be found to an equal degree in other trades. It is, in the first place, powerfully acted upon by the vicissitudes of the weather: a bountiful harvest, coming in contact with great commercial profits, brings a full and often an augmented price, to the great advantage of the farmer ”

“ THE WEATHER AND THE PRICE OF FOOD.
Our knowledge of the causes of Weather is so superficial and so narrow, that we are exposed to embarrassments and dangers from our ignorance in that department, as the ancients were in that and many others. We say sometimes how strange it must be to have lived in the early times, when men understood next to nothing of the heaven above or the earth beneath, or of the workings of nature all around them! How like guess-work their ways of living and seeking a living must have been! and how their daily life must have been made up of accidents! ”

“ If food is abundant, prices are low, but when the yield is small the demand is so great that prices become high.
Not only the men, but the women and children as well, are affected by these food values, because it is from the extra money left over after the actual cost of living is taken out that the clothing, the [Pg 15] house-furnishings, books, pictures, music, travel and all the pleasures of life must come.
Great as are our harvests, we are not raising much more than enough for our present needs. Each year we are using more of our food at home, and have less to export to other countries. ”

“ In the case of the specialized farmer, there is little or no guarantee for work beyond a short and definite period; that is, the period is necessarily short, but whether or not it is definite depends 283 a great deal upon the weather and prices of crops. It is obvious that an abundant crop might cause a low market price,—a price too low to pay for picking,—and employers who early in the season thought that they wanted a group of boys might decline to accept them at the last moment. ”

“ At present the big profits in the food business go chiefly to the gambling middlemen—the jobbers. This must be changed. Possibly the prices will not become lower; but if the method just suggested is carried out, the quality (flavor) of the food we eat will be vastly improved and the profits will go to those who deserve them—the market gardeners. Let us do all we can to make their work as alluring and profitable as possible in order to greatly increase their numbers. ”

“ Pork will disappear as a food staple and butter will be replaced by the more wholesome oleomargarine products. Within our large cities, an anomalous condition exists in the price of vegetables. Wholesale prices have not increased, indeed in many cases, they have decreased greatly; yet because of archaic methods of distribution, the retail cost is greater. ”

“ Increased food costs, for example, will bring new demands for wage increases from all war workers, which will in turn raise all prices of all things including those things which the farmers themselves have to buy. Increased wages or prices will each in turn produce the same results. They all have a particularly disastrous result on all fixed income groups. ”

“ But the vague prognostics of old times are not sufficient for the guidance of the skilful and provident farmer of our day. The barometer, the thermometer, and even the hygrometer, should be his companions and guides, or occasional counsellors. To the description and useful indications of these instruments, therefore, a sufficient space is devoted in the book before us. We do not know any other source from which the practical farmer can draw so much meteorological matter specially adapted to his own walk of life, as from this chapter upon the weather. ”

“ Recent experience has convinced me that the Congress must go further in authorizing the Government to set limits to prices. The law of supply and demand, I am sorry to say, has been replaced by the law of unrestrained selfishness. While we have eliminated profiteering in several branches of industry, it still runs impudently rampant in others. The farmers, for example, complain with a great deal 126of justice that, while the regulation of food prices restricts their incomes, no restraints are placed upon the prices of most of the things they must themselves purchase ”

“ When the price went down to a very low point on the last excessive crop it is probable that 100,000,000 bushels of wheat were fed to swine and to cattle. It proved to make better pork and beef than maize or Indian corn, and, as the price of meat did not decline in anything like the proportion to the price of wheat, the farmers who thus fed their excess secured a profit which the sale of the crude grain might not have given. ”

“ Since the increased attention paid to the signs of forthcoming weather of late years, and the good which has resulted therefrom to farmers, gardeners, civil engineers, miners, fishermen, and mariners generally, by forewarning of impending wet or stormy weather, the desirability of having good barometers exposed in public localities has become evident. ”

“ The imperfection of instruments in use at sea is notorious. The barometer having hitherto been used principally as a monitor to the mariner, to warn him by its fluctuations of the changes in prospect, its absolute indication of pressure has been but little regarded; and makers seldom if ever determined the real errors of these instruments, or, if known, still more rarely ever furnish the corrections with instruments themselves. ”

“ That an instrument so rude and so abundant in error, as is the marine barometer generally in use, should in this age of invention and improvement be found on board any ship, will doubtless be regarded hereafter with surprise; and it will be wondered how an instrument so important to meteorology and so useful to navigation, should be permitted to remain so defective that meteorologists, in their investigations concerning the laws of atmospheric pressure, are compelled in great measure to omit a reference to the observations which have been taken with them at sea. ”

“ The world's products are exchanged as never before and with increasing transportation facilities come increasing knowledge and larger trade. Prices are fixed with mathematical precision by supply and demand. The world's selling prices are regulated by market and crop reports. We travel greater distances in a shorter space of time and with more ease than was ever dreamed of by the fathers. Isolation is no longer possible or desirable. The same important news is read, tho in different languages, the same day in all Christendom. ”

“ The world shortage in coal has increased its cost in certain localities almost to that of a precious metal, so that in Paris within the year it has sold for $80 a ton. It is just as the political economists have always told us, that the law of supply and demand fixes prices. That which becomes scarce is already made dear.
Thus is explained quite simply over the world today the rising value of a baby. Civilisation is running short in the supply of men. ”

“ The same principles apply to the miller who wants wheat, to the distiller, the cattle-feeder, and the starch-maker who wants corn, to the brewer who wants hops and barley, to the brass founder who wants copper, and so on indefinitely. Insurance is one of two redeeming features of such speculation; and the other, which is even more important, is the steadying effect which it has on market prices. If no speculative buying83 of produce ever took place, it would be impossible for a grower of wheat or cotton to realize a fair price at once on his crop. ”

“ Being always well informed and not having mortgage charges to support, the American farmer is in a condition to resist more or less the maneuvers of speculation, and can form an idea as to the kind of grain of which the culture can be increased or diminished. With us the situation is very different; not only are the rates of transportation on our railways much higher than those of America (averaging fifty per cent more) , but our farmers are deeply in debt, and are at the mercy of all kinds of intermediary agents whose honesty is not of a very high standard. ”

“ Farming business is pre-eminently seasonal in character; the farmers over the greater part of the country need funds most at about the same times of the year, i.e., the fall and spring. A great increase in the demand for currency and capital, say in the fall, under an inelastic currency and credit system like our own, means to the farmer, highest interest rates at just the time when he needs most to borrow, greatest scarcity of cash at just the time when his need for cash is the most urgent, and prices depressed by a tight money market at the time of the year when he has most to sell. ”

“ The effect upon perverse human nature was what it always had been. As long as it had been plentiful nobody cared for it; when it began to grow scarce everybody clamored for it. Within ten days the visible supply of money in New York shrank more than one hundred millions.
There was a sudden halt in the mad speculation in wheat. The newspapers discovered that bread by the loaf in New York and Chicago could be bought{269} cheaper than wheat by the bushel or flour by the barrel. The revelation was received first with incredulity and then with dismay by the holders of grain. ”

“ AS INTERPRETED BY OFFICIAL FAIR PRICE LIST U.S. FOOD ADMINISTRATION For your own protection deal with merchants displaying this Card in their Windows, and whose Prices on STAPLE ARTICLES do NOT EXCEED those authorized by the U.S. Food Administration, which prices should be shown in the form of a newspaper clipping. ”

“ And when we have found that way to protect the farmers' prices from the effects of alternating crop surpluses and crop scarcities, we shall also have found the way to protect the nation's food supply from the effects of the same fluctuation. We ought always to have enough food at prices within the reach of the consuming public. For the consumers in the cities of America, we must find a way to help the farmers to store up in years of plenty enough to avoid hardship in the years of scarcity.
Our land use policy is a different thing. ”

“ Pursue sound economic, agriculture, fisheries, forestry and land reform policies that will permit farmers, fishers, foresters and other food producers, particularly women, to earn a fair return from their labour, capital and management, and encourage conservation and sustainable management of natural resources including in marginal areas ”

“ Sooner or later a similar revolution will be wrought in popular economics and we shall come to see that the course of prices is due chiefly to the movement of money and not to coincident movements of all or almost all other commodities at once. We now think only of the gold-value of goods ”

“ The maintenance of high levels of prices and wages in the United States is popularly ascribed to inflation. We have fallen into the habit of talking about inflation and deflation, owing to their being convenient expressions meaning the raising or lowering of price levels, but in fact the majority of economists bold that there is no such thing as monetary inflation in the United States at the present time. ”

“ The fact that food prices are relatively high and that the prices of chemicals, metals, lumber, etc., are relatively low, though their supply is relatively small, may be due to a concentration of purchasing power upon food, and the general direction of the flow of currency toward the purchase of immediate consumables. ”

“ Sometimes when we shop we don't realize how much inflation has dropped, because prices are still going up. But they're going up much more slowly than before. If food prices had kept rising as fast the last 2 years as the 2 years before we took office, a loaf of bread would cost 7 cents more than it does today, a half gallon of milk 18 cents more, a pound of hamburger 60 cents more, and a gallon of gas 97 cents more. ”

“ Governments are responsible for creating an enabling environment for private and group initiatives to devote their skills, efforts and resources, and in particular investment, towards the common goal of food for all. This should be undertaken with the cooperation and participation of all members of society. Farmers, fishers and foresters and other food producers and providers, have critical roles in achieving food security, and their full involvement and enablement are crucial for success. ”