Category: Produce

While campaigning in Michigan Wednesday, GOP vice presidential candidate JD Vance talked up a couple of ways to lower food prices – firing the agriculture secretary and increasing oil and natural gas production.

The topic came up when a reporter asked the Ohio senator what should be done about energy costs to help lower the price of groceries. A member of the crowd then shouted, “Fire Granholm,” a reference to Energy Secretary Jennifer Granholm, a former governor of Michigan.

“The first is we’re going to fire the agriculture secretary. … She’s not doing a very good job,” said Vance, possibly mixing up Granholm with Agriculture Secretary Tom Vilsack.

Vance went on to argue that lowering oil and natural gas prices could reduce fuel and fertilizer costs for farmers, savings he suggested would be passed on to supermarket shoppers. 

“If we ‘drill, baby drill,’ and take advantage of the incredible bounty of this nation, we’re going to lower food prices in a very big way for American consumers. That’s just a fact,” he said.

The average farm share of every dollar consumers spend on food is just under 15 cents, according to USDA’s Economic Research Service. The exact share varies according to the type of food and the amount of processing, shipping and packaging it requires. 

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ERS estimates farmers will spend $15.1 billion on fuel this year. Adjusted for inflation that is less than they spent in any year of the Trump administration except for 2020. 

On the other hand, fertilizer costs remain elevated. Farmers are expected to spend $31.7 billion on fertilizer this year, up from $31.1 billion last year but down from $33.5 billion in 2021 and $39 billion in 2022, when adjusted for inflation. Previous to that, fertilizer costs had not exceeded $30 billion in 2024 dollars since they reached $32.8 billion in 2015. 

Food prices rose sharply from 2021 into 2023, but inflation is now running below the historical average. According to the latest Consumer Price Index, released Wednesday, the cost of eating at home rose by 0.1% in July and is up 1.1% from July 2023.

ERS is forecasting that grocery prices will be up 1% in 2024 over 2023 and rise 0.7% in 2025. The 20-year average inflation rate for food eaten at home is 2.7%.

The Agriculture Department is working on a study of retail food pricing that is likely to raise questions about industry practices, Agriculture Secretary Tom Vilsack said Thursday.

The study comes as Republicans continue to hammer Vice President Kamala Harris over the food inflation that has taken place since she and President Joe Biden took office in 2021. Harris on Friday is expected to discuss an economic plan that includes cracking down on what she says is price gouging by food companies.

Vilsack, speaking to reporters at an American Coalition for Ethanol conference in Omaha, declined to address the Harris plan, citing Hatch Act restrictions on political activities of federal employees. But he said the USDA study would “be coming out very soon.”

“I think it’ll raise some some valid questions and issues about practices within the industry that ultimately impact and affect the price that people pay that bear some examination,” Vilsack said.

Vilsack sad he believes the USDA’s current partnership with the Department of Justice has been beneficial for ensuring competition across the food and agriculture sectors.

“We’ve been pleased with the work that the Department of Justice has made in terms of cracking down on potential antitrust violations,” Vilsack said.

The Federal Trade Commission issued a report earlier this year that said large grocery chains used their size to get a leg up on their smaller competitors as the pandemic disrupted supply chains.

The companies “used policies that imposed strict delivery requirements on their upstream suppliers and threatened fines for noncompliance. Walmart even tightened the delivery requirements its suppliers had to meet to avoid fines as the pandemic went on,” the report said. 

Coming out of the pandemic, Vilsack also has been trying to expand meatpacking options for livestock producers by funding new processing capacity. USDA announced last month that a fresh round of grants, totaling $110 million, for projects in 30 states.

The Meat and Poultry Processing Expansion Program provides funding for building or expanding of processing facilities, installing new equipment, ensuring they are meeting packaging and labeling requirements, and helping companies meet staffing goals.

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Food prices rose sharply starting in 2020, before Biden took office, but inflation has slowed considerably over the past year. The Consumer Price Index for food eaten at home rose 3.5% in both 2020 and 2021 and then jumped 11.4% in 2022 and 5% in 2023., but the index for grocery prices has risen just 1.1% since July 2023.

USDA’s Economic Research Service is forecasting that grocery prices will be up 1% in 2024 over 2023 and only 0.7% in 2025. The 20-year average inflation rate for food eaten at home is 2.7%.

Grocery prices fell slightly, 0.2%, in 2017, the first year of the Trump administration, and rose just 0.4% in 2018 and 0.9% in 2019 ahead of the pandemic.

Scott Lincicome, vice president of general economics for the Cato Institute, a libertarian think tank, responded on X to reports of Harris’ economic plan by citing a New York University survey showing the grocery industry had a 1.18% net profit margin last year.

Last year’s profit margins for farming and food processing were 7.12% and 6% respectively, according to the NYU data. 

Julie Anna Potts, president and CEO of the Meat Institute, which represents meat processors, said the federal ban on price gouging that Harris wants “does not address the real causes of inflation.”  

“The Harris campaign rhetoric unfairly targets the meat and poultry industry and does not match the facts. Food prices continue to come down from the highs of the pandemic. Prices for meat are based on supply and demand. Avian Influenza, a shortage of beef cattle and high input prices like energy and labor are all factors that determine prices at the meat case,” Potts said in a statement. 

Summit Carbon Solutions CEO Lee Blank said the company’s carbon dioxide pipeline is crucial for the future of Midwest agriculture, and that Summit is pushing ahead with trying to win over landowners in Iowa and South Dakota.

“Our company is going to be built on permits, and we have to go get the permits, and that’s what we’re currently working on,” Blank said at a meeting of the American Coalition for Ethanol in Omaha.

The five-state, 2,500-mile-long project is intended to gather carbon dioxide form ethanol plants throughout the upper Midwest and deposit it at a site in North Dakota.

The company has struggled to get needed approvals from state agencies and landowners, but the Iowa Utilities Commission in June approved Summit’s main liquid carbon dioxide pipeline through the state, a significant victory for the carbon capture and sequestration project after earlier denials in North Dakota and South Dakota. 

The company now is starting the process of getting a permit for its expansion routes in Iowa. 

Next week, the company will begin 23 public meetings in Iowa to talk to landowners who may be affected by those lines, Blank said. “Not everyone there is all that happy to think about the project coming across a particular property,” he said.

Blank said the company would be applying for the second permit in Iowa 30 days after the public meeting process has concluded. He said he hoped the approval process would be shorter than it was the first time. “I truly hope it doesn’t take 34 months, because that’s what the first permit took … start to finish,” he said.

In South Dakota, the company is meeting with landowners to win their approval for the pipeline route before reapplying for approval of the project. 

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Blank said he personally went to South Dakota to meet with landowners who “just simply don’t like us or don’t like our project.” 

He said the company will continue having those meetings and conveying the message to landowners, “If you like it, we’ll survey. If you don’t like it, we will move on and try and survey someone else that does.”

In North Dakota, the company is waiting on a decision from the state on both the sequestration site and the pipeline. The hearing process is completed. 

He said the company was less concerned about winning approval in Nebraska and would leave that process for later. 

The ultimate goal of the pipeline is to lower the carbon intensity scores of participating ethanol plants, making it easier for them to qualify for federal and state incentives and find new markets in products such as sustainable aviation fuel. 

Blank said corn growers need to find new domestic markets as they face increased competition from foreign producers. 

“We have got to internalize the usage of our corn crop, and we have a way to do that, and it starts with the pipeline,” he said. 

Vice President Kamala Harris on Friday promised to control food inflation, an issue that has dogged Democrats throughout the campaign season, by threatening penalties on companies that raise prices unfairly.

Rolling out her economic plan during a speech in Raleigh, North Carolina, Harris said her first-ever ban on food price gouging would come with penalties for “opportunistic companies that exploit crises and break the rules,” while supporting smaller food businesses.

Her plan would “secure new authority” to allow the Federal Trade Commission and state attorneys general to investigate and penalize companies that violate the ban.

It’s not clear how a price-gouging ban would work, but the plan says Harris wants to “set clear rules of the road to make clear that big corporations can’t unfairly exploit consumers to run up excessive profits on food and groceries.”

She’s also promising to build on USDA’s funding for expanding meat processing capacity.

Overall, Harris said her plan would increase competition in the food industry which could yield lower prices for American consumers. 

“When I am elected president, I will make it a top priority to bring down costs and increase economic security for all Americans,” Harris said. “As president, I will take on the high costs that matter most to most Americans, like the cost of food.”

Many economists panned her price-gouging ban even before she formally announced it. Jason Furman, who chaired President Barack Obama’s Council of Economic Advisers, told the New York Times her proposal was “not sensible policy, and I think the biggest hope is that it ends up being a lot of rhetoric and no reality,” 

The Committee for a Responsible Budget estimated that other proposals in her economic plan, including expansions of the child tax credit and earned income tax credit, and new subsidies for health insurance and housing, would increase the federal budget deficit by $1.7 trillion over 10 years. 

The Consumer Price Index for at-home food rose 3.5% in 2020 and 2021, before jumping 11.4% in 2022 and 5% in 2023. Since July 2023, the index for grocery prices has only increased by 1.1%. Republicans note that even if inflation has moderated, consumers are paying far more for food than they did in 2020. 

One reason prices jumped was supply chain disruptions caused by the COVID-19 pandemic. Other events, like the avian influenza, war in Ukraine and shrinking cattle production have also influenced prices. 

Despite supply chains recovering after the pandemic, Harris said food prices are still too high, with a loaf of bread costing 50% more than before the pandemic. She said big food companies are seeing high profits, but only some grocery chains are passing savings on to consumers. 

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She pointed to her experience as California attorney general where she “went after” companies that illegally inflated prices on medication and electronics. She said this resulted in a $1 billion win for consumers.

“So believe me as president I will go after the bad actors,” Harris said. 

Harris also attacked former President Donald Trump for his proposal to impose across-the-board tariffs on imported products. She described the tariff increase as a national sales tax and said it would cost families thousands of dollars a year.

Industry groups including the Meat Institute, National Chicken Council and the Food Marketing Association, which represents major grocers, have pushed back on Harris’ proposals. 

“Chicken prices are largely affected by supply and demand, by major input costs like corn, soybeans, energy, packaging, transportation, and by fiscal policy and burdensome government regulations. Not price gouging,” said NCC Interim President Gary Kushner in a statement Thursday. 

Republicans accused Harris of proposing price controls. “If you think things are expensive now, they will get 100 times WORSE if Kamala gets four years as President. Under her plan, Kamala will implement SOVIET Style Price Controls,” Trump said in a Truth Social post. 

A Trump-Vance campaign press release was headlined: “Comrade Kamala Goes Full Communist.”

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The Democratic National Convention kicking off Monday in Chicago gives the party a chance to make the case that it cares about lifting up rural residents, a demographic Democrats have been accused of ignoring in recent elections even as their support in non-metropolitan areas has shrunk significantly.

If anyone can make that case, it’s Vice President Kamala Harris’ running mate, Minnesota Gov. Tim Walz, according to some former congressional colleagues, including longtime Rep. Ron Kind, D-Wis., who served with Walz in Congress from 2006 to 2018.

“I think people in rural communities can relate to him and his background, and he certainly works harder to get into those areas and listen to them,” said Kind, now a member of Arnold & Porter’s legislative and public policy practice.

“I think one of his superpowers is his listening ability,” Kind said. “Not enough people running for office take time to visit these small rural communities, sit down and just listen to people and what they’re up against. And Tim does that so well and learns from it and grows from it, and that’s why I think he’s been such an effective leader.”

Harris and Walz come into the convention with the party enjoying new energy and momentum in the polls, but races in key battleground states such as Michigan, Pennsylvania and Wisconsin remain tight. Carving into former President Donald Trump’s rural dominance would help the Democrats. 

According to the Pew Research Center, former Trump increased his share of the rural vote from 59% in 2016 to 65% 2020.

Kind noted that Walz grew in small-town Nebraska before marrying and moving to Minnesota, where he became a schoolteacher and served in the National Guard.

“Policy-wise, he knows that we need to be investing in our rural communities — economic development, infrastructure, rural broadband, support for our family farmers.”

He contrasted that with Trump’s talk of at least 10% across-the-board tariffs, including higher duties on China, and “it’s a recipe for economic disaster.”

“China is still our No. 1 export market in the world. There will be retaliation if Trump does the across-the-board tariffs, which will disproportionately affect rural America and our agriculture producers.”

Kind also points to Trump’s immigration plans, outlined in the Republican platform, to deport millions of undocumented immigrants from the U.S. 

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With “mass roundup and deportation of migrant labor, our dairy farms in the Upper Midwest will not be able to survive,” Kind said.

Steven Schier, emeritus professor of political science at Carleton College in Minnesota, said he believes Walz could help the Democrats grab back some of the support they’ve lost in rural America.

“If you look at the polls this year pretty steadily, Biden and Harris have not done well with rural voters, and you can see why. I mean, they’re not exactly rural candidates in their backgrounds or orientation. So, it is interesting to ask if Walz will be able to cut into that.”

Given his own background, “there are some reasons to think he might,” Schier said. In addition to his boyhood, in which he spent summers working on the family farm, Walz went to Chadron State College, a public university in Nebraska, and was a football coach and social studies teacher in Mankato, Minn., “a medium-sized city in Minnesota.”

“All that would suggest a Midwestern identity that might appeal to rural voters,” Schier said. “The other question is where he is on the issues, and I would think on ag policy, he’ll be well-received, but on all the culture war issues, he’ll be controversial in rural America, because, as you know, it’s culturally the conservative part of the country.”

Speaking for the other side of the ballot, Indiana farmer Kip Tom, who is leading fundraising efforts for the Farmers and Ranchers for Trump 47 Coalition, said he has nothing against Walz on ag policy.

“He’s stood alongside agriculture,” said Tom, a former ambassador to the United Nations agencies for food and agriculture Organization in Rome. While careful to say he’s not advocating for Walz and Harris, he said the governor has “supported the farmers’ position on [waters of the United States],” has been “good on ethanol,” and also has been positive “for some of the animal agriculture, but it stops right there.”

But Tom criticized the Democratic ticket on tax policy, saying “it sounds like they’re going to walk the same line that Biden did,” which would include trying to end stepped-up basis and reducing the federal estate tax exemption. 

Stepped-up basis means that the capital gain on an inherited asset is calculated from the date that the original owner died, rather than when he or she acquired the property. Under current law, heirs don’t owe taxes until the assets are sold. President Joe Biden proposed in 2021 to tax capital gains at death but the idea never got anywhere in a Democratic-controlled Congress. 

The estate tax exemption was doubled by the Tax Cuts and Jobs Act in 2017 and is now $13.6 million per person; the doubling of the exemption is scheduled to expire at the end of next year along with a number of other TCJA provisions important to agriculture. 

Asked about Trump’s continuing talk of tariffs, Tom said, “First of all, President Trump needs to finish the sentence and say, What does he mean by those tariffs? You’ve never found a person that likes to deal more than President Trump. He loves to look for, in his words, ‘beautiful deals,’ and I don’t see him doing anything that’s going to damage a base that is highly supportive of him, yet depends on the exports of our goods.”

“When he starts talking about tariffs, I think if you go back when he was in office, he made things right with us. He got back out there and created deals on the side with other countries, and ended up fixing what needed to be done. So I’m not as worried about him on trade as a lot of people are.”

The DNC had not released a schedule of speakers as of Sunday, but a number of issue-specific caucuses will be holding meetings on the sidelines of the convention, including the Rural Council, the Environmental & Climate Crisis Council, and the Labor Council.

Kylie Oversen, the Democratic National Committee’s Rural Council chair, said Kentucky Gov. Andy Beshear is scheduled to appear Tuesday along with his lieutenant governor, Jacqueline Coleman. 

Oversen, a former state legislator from North Dakota, said the council is hoping to organize “rural tours” involving surrogates from the campaign in  battleground states and beyond “as much as we have the capacity to do so.”

President Joe Biden is the convention’s keynote speaker Monday night.

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