http://www.nytimes.com/2008/04/02/dining/02cheap.html

April 2, 2008

Some Good News on Food Prices

By KIM SEVERSON

"WHILE grocery shoppers agonize over paying 25 percent more for eggs
and 17 percent more for milk, Michael Pollan, the author and de facto
leader of the food intellectuals, happily dreams of small, expensive
bottles of Coca-Cola.

Along with some other critics of the American way of eating, he likes
the idea that some kinds of food will cost more, and here's one reason
why: As the price of fossil fuels and commodities like grain climb,
nutritionally questionable, high-profit ingredients like high-fructose
corn syrup will, too. As a result, Cokes are likely to get smaller and
cost more. Then, the argument goes, fewer people will drink them.

And if American staples like soda, fast-food hamburgers and frozen
dinners don't seem like such a bargain anymore, the American eating
public might turn its attention to ingredients like local fruits and
vegetables, and milk and meat from animals that eat grass. It turns
out that those foods, already favorites of the critics of industrial
food, have also dodged recent price increases.

Logic would dictate that arguing against cheap food would be the wrong
move when the Consumer Price Index puts food costs at about 4.5
percent more this year than last. But for locavores, small growers,
activist chefs and others, higher grocery bills might be just the
thing to bring about the change they desire.

Higher food costs, they say, could push pasture-raised milk and meat
past its boutique status, make organic food more accessible and spark
a national conversation about why inexpensive food is not really such
a bargain after all.

"It's very hard to argue for higher food prices because you are ceding
popular high ground to McDonald's when you do that," said Mr. Pollan,
a contributor to The New York Times Magazine and author of "In Defense
of Food: An Eater's Manifesto" (Penguin Press). "But higher food
prices level the playing field for sustainable food that doesn't rely
on fossil fuels."

The food-should-cost-more cadre wants to change an agricultural system
that spends billions of dollars in government subsidies to grow
commodities like grain, sugar, corn and animal protein as cheaply as
possible.

The current system, they argue, is almost completely reliant on
petroleum for fertilizers and global transportation. It has led to
consolidations of farms, environmentally unsound monoculture and, at
the end of the line, a surplus of inexpensive food with questionable
nutritional value. Organic products are not subsidized, which is one
reason those products are more expensive.

As a result, the theory goes, small farmers can't make a living,
obesity and diabetes are worsening, workers are being exploited and
soil and waterways are being damaged. In other words, the true cost of
a hamburger or a box of macaroni and cheese may be a lot more than the
price.

"We're talking about health, we're talking about the planet, we're
talking about the people who are supporting the land," said Alice
Waters, the restaurateur, who has more than once been accused of
promoting a diet that is either unaffordable or unrealistic for a
working person.

Urging others to eat better (and thus more expensive) food is not
elitist, she said. It is simply a matter of quality versus quantity
and encouraging healthier, more satisfying choices. "Make a sacrifice
on the cellphone or the third pair of Nike shoes," she said.

Anna Lappé, founder of the Small Planet Institute, which studies food
and public policy, said that equating cheap food with bad food is an
oversimplification, because food pricing is a complex process.
Investors skew the volatile commodities market. And less money is
spent on the actual food than it is on marketing, packaging,
transportation and multimillion dollar compensation for the biggest
food companies' executives.

"But it is really hard for people to understand speculations on
commodities markets and even how food companies externalize costs when
they are going to the store to buy a gallon of milk," she said.
Besides, an intellectual debate on food costs might not be exactly
what a cash-strapped grocery shopper needs right now. In fact, arguing
for more expensive food seems, at the least, indelicate.

"Someone on the margin who says 'I'm struggling' would say rising food
costs are in no way a positive," said Ephraim Leibtag of the United
States Department of Agriculture's Economic Research Service. Even if
the food budget isn't an issue, there are plenty of people who view
low-cost food as a national triumph.

"If you think that mass production and vast distribution predicated on
cheap energy is a good system, then the dollar hamburger is a good
thing," Mr. Leibtag said.

Still, there are likely to be some tangible advantages to current
prices. For one thing, the relative bargains are likely to be found in
the produce aisle and the farmers' market stalls. The Consumer Price
Index for fresh fruits and vegetables is slightly lower than a year
ago. That is good news for many shoppers, including the poor who use
food stamps and are experts in stretching a food dollar, said Laura
Brainin-Rodriguez, a public health educator who helps the poorest
people in the San Francisco Bay Area eat better.

"People here will take two buses to get to Chinatown to get cheaper
produce," she said.

Policies meant to support local farms and urban agriculture programs
will likely be strengthened, too. Shorter supply chains become
increasingly attractive as fuel costs rise, said Thomas Forster, a
former organic farmer and veteran of four farm bills who is working
with the United Nations on food issues.

To that end, both state and federal governments have begun to
encourage institutional buyers like school districts to consider
geography and not just price when seeking bids on food contracts.

"It could also lead to a move toward more local slaughterhouses and
stronger regional meat systems," he said.

In the category of meat and dairy, rising commodity prices could very
likely help the small but growing number of farmers who raise animals
the old-fashioned way, on grassy pastures. With little or no need for
expensive grain, these farmers can sell their milk and meat for more
attractive prices.

That is welcome news to Ned MacArthur, founder of an organic, pasture-
based dairy in Pennsylvania that sells milk, butter and other food
under the Natural by Nature label. Unlike dairy farmers who feed their
animals grain, people on the 52 farms in his consortium are looking
forward to the coming months, he said.

"The grass is starting to grow now so within the next couple weeks the
cows are really going to take off," he said.

Although prices for organic groceries are rising at least as fast as
their conventional counterparts, organic shoppers may soon find that
they have more low-priced options. Tighter grocery budgets could drive
the expansion of less-expensive "private label" organic brands, as
supermarkets and big box stores try to attract new consumers and keep
established organic shoppers from walking away.

"Organics are still considered food for the elite, but private labels
make organics more the norm in the market place," said Gary Hirshberg,
president of Stonyfield Farm and a board member of four other organic
food and beverage companies.

Of course, all of this is theoretical. If the American shopper decides
cheap food is the most important thing, the intellectual musings of
the food elite might be trampled in the stampede to the value menu.

Marcia Mogelonsky, a senior research analyst at Mintel who has
analyzed food trends for 17 years, said it was too soon to tell.

"The main thing is that you need a little evidence before you say
everyone is clipping coupons and eating dirt," she said. "All we know
for sure at this point is that people are going to the supermarket and
noticing butter is $4 a pound and not $2."

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