Over the past 40 years, the field of behavioral economics has emerged to explain why humans make irrational decisions. We talk with one of the pioneers of the field to find out what’s behind the choices we make, and how we can use this knowledge for good.
Guest Host: Rebecca Roberts
As prices for commodities and fuel have steadily risen over the past year, most Americans are feeling the pinch in their grocery bills. The increases are hitting seniors and those with lower incomes especially hard. We look at the unique challenges faced by vulnerable populations and the local organizations that serve them.
- Sophie Milam Senior Policy Counsel for Feeding America
- Lynn Brantley President and CEO, Capital Area Food Bank
Take Our Poll on Rising Food Costs
MS. REBECCA ROBERTSFrom WAMU 88.5, at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your community with the world. I'm Rebecca Roberts sitting in for Kojo. We've all noticed climbing prices at the gas pump, but many are also feeling the pinch of higher food prices at the supermarket checkout. Groceries are taking a bigger and bigger bite out of household budgets, especially for people with lower incomes.
MS. REBECCA ROBERTSHere in our region, more than half a million people are at risk of experiencing hunger, including a shocking 40 percent of children living in the District. And higher food prices, along with a tough economy, are pushing those numbers up. Local food pantries and other organizations that help the hungry are feeling the strain as government agencies slash budgets and the economy struggles.
MS. REBECCA ROBERTSJoining us to discuss it, here in studio, are Lynn Brantley. She's the president and CEO of the Capital Area Food Bank. Welcome.
MS. LYNN BRANTLEYThank you. Glad to be here.
ROBERTSAnd also here in the studio is Sophie Milam. She's senior policy counsel for Feeding America. Feeding America is a national hunger relief organization. Welcome to you.
MS. SOPHIE MILAMGood morning.
ROBERTSAnd you can join us by calling 800-433-8850 or email us, firstname.lastname@example.org. You can also get in touch with us through Facebook or send us a tweet to @kojoshow. Sophie Milam, let's start with you and just quantify the problem here. How much have food prices gone up in the last year?
MILAMWell, food prices have actually been relatively stable the last couple of years. But the forecast for this year is that they'll rise. The grocery prices will rise about 4.5 percent.
ROBERTSAnd why is it usually stable? And why is it set to rise?
MILAMWell, you know, to give you some perspective, since 1991, food prices have increased an average of 2.5 percent per year. In 2007 and 2008, folks may recall the sharp spike that we saw in food prices, where grocery prices were going up by 4 and 6 percent in those years. That's atypical, unless we see a drought year, like we had in the late '80s, early '90s. But this year, we are starting to see the forecast that food prices will go up again.
MILAMWe're already experiencing that. Lynn can talk a bit about that. But, essentially, what this does is it puts the squeeze on low-income families for whom food is already a greater share of their household budget and also puts a squeeze on the nutrition assistance programs and food banks and charitable food providers that many of these low-income families rely on.
ROBERTSSo if we're talking about, you know, 4 or 5 percent on what is traditionally about 10 percent of your after-tax income -- what average Americans spend on food -- it doesn't seem like an enormous, you know, sacrifice. But how is that picture different with low-income families, Lynn Brantley?
BRANTLEYWell, I think, you know, one of the things you have to factor in, especially here in the Washington area, is the cost of housing. People -- there was a column done by Michelle Singletary stating that low-income people pay over 50 percent of their income on housing. So the one variable they do have is food. And off times, they can't stretch their budgets to include that. And that's why they begin to come to pantries and food closets for help.
MILAMAnd low-income households actually spend a greater -- so, as she said, a greater share of their income, about 17 percent...
MILAM...compared to 13 percent...
MILAM...of typical -- of average households.
ROBERTSAnd have the price increases been sort of across the board? Or are there some products that seem to show it more than others?
MILAMCertainly, it shows up in some products more than others, and that's explained by a couple of factors. For example, you know, it's the input cost and the amount of processing. Eggs, which have -- it's eggs. When the cost of feed goes up, then you're really -- the egg prices are very sensitive to the increased cost of feed.
MILAMFor something like cornflakes, which is more processed, even if corn prices go up by 50 percent, that only translates into an increase in the price of cornflakes by a little over one cent. So it depends on what the input cost is that's driving it and also how sensitive the food product is to...
BRANTLEYI think oil has been a major factor in terms of making food prices go up also. I think the fact fertilizer is made from oil, and so the impact of transportation and fertilizer and all that sort of thing has been really the biggest reason that food prices have gone up, I think. That's my only humble opinion. I'm not an economist, but...
ROBERTSAnd what about region to region? Do you see spikes in certain parts of the country that are more susceptible?
MILAMIn the U.S., it's less of an issue because of -- our food system is so developed...
MILAMExactly. In other parts of the world, you do see those sorts of sensitivities.
ROBERTSWe are talking about food security and how to keep people from going hungry when economic times are tight and, particularly, food prices are going up. Have you seen your grocery bills go up over the past year? What are you doing about it? How are you -- are you cutting things out to economize? Are you trying to make do with other things? And how do you think food aid programs are working here in the city?
ROBERTSPlease join us, 800-433-8850, or send us email, email@example.com. Lynn Brantley, why don't you just describe for us briefly what the Capital Area Food Bank does? And we'll talk a little bit about the role it needs to play.
BRANTLEYWell, the Capital Area Food Bank is a part of Feeding America, and we're one of the sister food banks. There are 200 throughout the country. And so we distribute about 30 million pounds of food throughout the metropolitan Washington area, Northern Virginia, D.C., Prince George's County and Montgomery County. And of that 30 million, about 15 of it is fresh produce. We serve about 700 food programs.
BRANTLEYAnd those food programs are seeing anywhere between 30 percent to 200 percent increases in the number of people who are coming to their doors. And they're, by and large, working people. Many of them are working two and three jobs just to keep life and limb together.
ROBERTSAnd do you have to show some sort of qualification for the food that you receive at food banks?
BRANTLEYWell, in terms of us as a food bank, you have to be a 501 (c)(3) tax-exempt organization. You have to be feeding hungry people. You can't -- if you're a church, you can't just come and get it and cook a church supper...
BRANTLEY...with it. But each individual agency has their own criteria in terms of whether they serve once a week, once a month, how they set up their own program. We do monitor and go and visit them yearly to assure quality and that sort of thing in terms of standards, that they're meeting standards and that sort of thing, so...
ROBERTSAnd I understand that the food bank was never intended to be a permanent facility. It was a temporary fix for a crisis.
BRANTLEYWell, it started back in the -- we started in 1980. And it was during a recession. And I was working with community ministries at the time. And we were seeing terrible need at that time. So that's when we started at the interfaith conference and thought things were tough then. But I can tell you that, 40 years later or 30 years later, I've never seen a time quite as bad as right now.
BRANTLEYCompared to when the food bank was actually...
BRANTLEYAnd I was working even 10 years before that on hunger issues. And there was a time in this country when hunger had nearly been obliterated. And that was when the food stamp program was working well. But then the cuts came in the late '70s and the early '80s, and it was devastating then. And it continues to be. We never have rebounded from that.
ROBERTSAnd what about your costs in terms of operating the food bank?
BRANTLEYWell, they're going up. And it -- gasoline, I mean, is a huge factor because we have 12 trucks. You know, we deliver food. Our agencies -- we've had to institute a fee on our fresh vegetables, and we're trying to compensate by that. We have a million-dollar campaign to try to underwrite that, so that fee can be eliminated. But we just can't bring in the fresh produce like we used to if we didn't begin to work in partnership with our agencies.
ROBERTSAnd why did you used to try to protect the produce from the fee? Don't you traditionally charge a fee for shelf-stable goods?
BRANTLEYYes. Well, I -- in the beginning, when we started with fresh produce, nobody was taking it. It was a real big struggle. And, in fact, we developed a program with the Chesapeake Bay Foundation. We grew organic vegetables. We continue to do that. But, you know, so it -- people have become accustomed to it, but we just can't keep underwriting it anymore. Fifteen million pounds is a lot to be distributing.
BRANTLEYAnd we're hoping to work in partnership. We're hoping to find funding from foundations, corporations, from any number of people who are willing to support. On our website, we just developed a site for -- to raise a million dollars, hoping that people will begin to respond to that.
ROBERTSLet's take a call. This is Karen in Rockville, Md. Karen, welcome to "The Kojo Nnamdi Show."
KARENHi. Thank you.
KARENI was listening to the woman speaking, and she said the prices have been stable. I agree the prices have been stable, but what I personally noticed while shopping is that sizing is changing. And so the 32 ounces of Hellmann's Mayonnaise is now 30, but the price is stable. And I see that with many products, and that seems, to me, to be a price increase.
ROBERTSYeah, Karen, thanks for...
KARENI'm just wondering...
ROBERTSThanks for your call. Sophie Milam, is that one of those things, that the absolute price hasn't changed, but the price per pound or ounce might have?
MILAMThat certainly is possible. And what you're probably also likely to see is, for example, meats and eggs and dairy are going to go up more this year than other items. Fresh vegetables are also -- the costs are going to go up a bit more than other items. So you have to really -- some folks will see it on their total grocery bill. And most folks will see it on those individual items. They'll begin to notice those price increases.
ROBERTSAnd, in general, on a national basis -- well, on a regional basis, too -- what are the statistics on how many people at least some time don't have enough money for food?
MILAMOver 50 million people across the country struggle to put food on the table, which has grown tremendously over the last couple years because of the recession. Food banks around the country, our network of food banks have seen a 46 percent increase in the number of clients served...
MILAM...since 2006. And that mirrors the fact that the number of households struggling with food and security increased 41 percent over about the same period. So it's grown tremendously as a result of the recession and ongoing unemployment. Unemployment nationally is stuck around 9 percent, so we know that the need for food assistance is not going to go away anytime soon.
ROBERTSAnd what is the role of the federal government? How is that changing?
MILAMWell, the federal government is certainly at the frontlines of protecting families against hunger. The biggest program is the food stamp program, now called SNAP, serves about 45 million people each month. There are also programs that are targeted specifically at vulnerable populations.
MILAMSo while the SNAP program is intended to supplement a household's monthly grocery budget, there are programs that are targeted specifically at children, at seniors, those sorts of populations for whom the impact of hunger and poor nutrition is more severe.
ROBERTSWe've been seeing, in the various versions of the budget battle that have been going back and forth, that cuts in SNAP, cuts in WIC have been on the table. What do you think are the prospects for those?
MILAMWell, it's of incredible concern to us. At the same time, the need is very high, and that programs are facing these challenges, families are facing the challenges of higher food costs and higher gas costs, other inputs. Congress is talking about making really significant cuts to the program.
MILAMSo, for example, the House of Representatives has passed a bill recently that would cut, I think, about 150,000 low-income seniors off of a monthly food package, up to 350,000 low-income women, infants and children from the WIC program, a 20 percent cut to the support that food banks receive to help distribute and provide food through the emergency food network.
MILAMSo it's just -- we recognize the challenges, of course, that Congress is facing in terms of the federal budget. But we truly believe that you cannot balance the budget on the backs of the most vulnerable, those families that are least able to sustain these sorts of cuts.
ROBERTSWe've got a call from Steven in Washington, D.C. Steven, welcome to "The Kojo Nnamdi Show."
STEVENHi. Thank you for taking my call. One of my questions is, you know, the spike in food, increased prices, could this be also because of urban sprawl? I mean, if you look at, like, Virginia and Maryland, all these farms that used to produce food are now subdivisions. And, you know, the larger producers are now monopolized. There's no more local farms. Could that have an impact to the food and price in a whole?
BRANTLEYFor sure. I mean, that and, you know, transportation costs add to the cost of food. And when you have to transport it further, that's an added cost for a food, and to access -- for us here in Washington, to be able access local fresh produce is very difficult. We are not a food-producing area, so we're a food bank that's kind of encapsulated in a metropolitan Washington area.
BRANTLEYSo we've had to go to Pennsylvania and to Virginia and to other places to look at contract growing and many different ways to get fresh produce.
MILAMThe biggest drivers of rising food prices are going to be things like -- rising incomes in the developing world is really putting a lot of pressure, increased demand -- as incomes go up, individuals want to purchase more nutritious foods, a greater variety of foods, and -- like grains and -- I'm sorry, excuse me -- dairy and meat. And so that puts pressure on grains that might otherwise go for consumption to go to feed. So that puts pressure on rising food costs.
MILAMAnd then you have sort of drought-specific issues. There were -- there's currently a drought in China. Last year, we saw some drought in Russia and Argentina, flooding and -- or heavy rains in Australia and Canada. So you do have these short-term dynamics with the weather and commodity prices, as well as the longer-term dynamics of rising incomes and rising demand for these other food products.
ROBERTSAnd, Lynn Brantley, you mentioned about trying to get some of your produce on contract from farms. In general, where does your food come from?
BRANTLEYWell, it comes, of course, from Feeding America. We get about 2 million pounds from them. We -- wholesalers, retailers, farmers, the Washington Area Gleaning Network. We -- it depends on what type of food and who -- we have grocery chains that are on our board. We've got Harris Teeter, GIANT, Safeway, Whole Foods. We have a wonderful support system, but it's mostly grocery chains. We don't have food manufacturers.
BRANTLEYWe don't have food growers in the area. So we're -- we struggle to keep our head going and to keep food going out the door.
ROBERTSAnd when you're trying to raise this million dollars, where are you going?
BRANTLEYWell, that's strictly for fresh produce that we're looking to underwrite the cost of that for our agencies, in particular. But, I mean, we're going to Pennsylvania, we're talking to the Amish farmers up there. We're talking to the Washington Area Gleaning Network, how we can support them more.
ROBERTSTell us a little about what gleaning is.
BRANTLEYWell, it's from the Book of Ruth. It's very biblical. It's ancient, and it was when the fields -- the corners of the fields, the edges of the field were left for the poor and the widows. And so the whole concept of food banking is gleaning the grocery, gleaning the food industry, getting that food that would otherwise be wasted and getting it to people who are in need. We're a very wasteful country.
BRANTLEYI think we still -- are still wasting about 96 billion pounds of food. So there's work to be done, maybe in different avenues than it used to be. But, I think, fresh produce is an -- is opportunity, but there's costs, certainly, associated with that.
ROBERTSWell, is there an analogy here, too, you know, when gas prices hit a certain threshold, people start paying attention to fuel economy? When food prices hit a certain threshold, will people stop wasting so much food?
BRANTLEYWell, I think, that probably might be possible. I think, certainly, you're very much more careful, and there -- my grandmother used to have a soup pot on the back of the wood stove, and everything would go into that soup. Nothing was wasted, not a pea. They were farmers. So I think, you know, to be better stewards of what we do have, I think we're all called upon to do that.
BRANTLEYI think, even in third world countries, there's food rioting right now because people are having to pay so much for their food. So, I think, we have to be good stewards overall, not just here in the States, but -- so that all may eat. I think it's critical.
ROBERTSWe have an email from Jenna who says, "I heard somewhere that 40 percent of the crops in Georgia went unharvested because of new crackdowns on immigrant workers. The farmers can't find anyone to pick the fruits and vegetables. I imagine, if this is true in Georgia, it's true in other places. What is the effect on produce prices?" Sophie Milam, do you know what she's talking about?
MILAMWell, I think, you know, you also have flooding in parts of the country in North Dakota and Missouri. Many of the national natural disasters that we've seen this year are having a localized impact on farmers and agriculture. What the impact of that will ultimately be, in terms of retail food prices that we see around the country because we are such a nationalized food distribution manufacturing system, that will likely be mitigated.
MILAMBut, I mean, it's certainly just another piece of the puzzle.
ROBERTSWe also have an email from Carol in Reston, who says, "How do you explain what's happened to price of McCann's Irish Oatmeal, a nutritious unprocessed staple of my diet? I've bought it for several years at Trader Joe's for $4.49 for a 28 ounce tin, and yesterday, it was $5.99. That's a huge increase, $1.50. I've heard there's a worldwide shortage of grains. Is this a reflection of that shortage? And are prices likely to continue to rise?"
MILAMWell, the pressure on wheat and corn and other grains is certainly quite high. And global food stocks have declined. So, you know, I think, roughly in the last year, wheat prices have gone up upwards of 70 percent. Corn has gone up upwards of 80 percent. And that's why you -- because, here, we do have processed food, and these components are just but one piece of what goes, both in terms of ingredients, but also in terms of getting that food to the consumer.
MILAMYou have the transportation cost, you have manufacturing, you have advertising, you have labor cost. So a lot of these things get become mitigated as the food travels from farm to the consumer. Farm -- the actual food cost is roughly 20 cents of every dollar that you pay at the grocery store. As for the cost of that particular product, I can't speak to them.
ROBERTSLet's hear from Morrie (sp?) in Rockville, Md. Welcome to "The Kojo Nnamdi Show."
MORRIEHi. Just a quick comment. The first is that I find it interesting that every time I'm commenting or dialoguing with my friends about budget cuts and things like that, they seem to get outraged about people on food stamps and never talk about other expenditures. And I don't know why that is. Because it seems to me that having a pregnant woman and children having full access to food should be a priority in our country.
MORRIEBut people seem to get outraged about that and not about other expenditures. And the other quick comment is that I find it interesting also that there seems to be a misunderstanding about growing food. And I can tell you 'cause I grow my own food, and I am a small farmer. It's really expensive, very difficult, cannot get labor. If you get labor, it's mostly people that are not able to really get to your home because they don't have transportation.
MORRIEIt's just a challenge. And you don't seem to get the kind of help and support that we need to be able to grow food. Yet people love to buy organic, and they want -- you know, the one caller that talked about urban sprawl and how we're taking over the farms. Try to be a farmer. Try to be productive and make a buck. Impossible.
ROBERTSMorrie, your phone is cutting in and out. But let me ask you quickly where your farm is and what do you farm?
MORRIEWe are here in Germantown.
ROBERTSUh huh. And what do you generally grow?
MORRIEWell, I grow mostly vegetables and fruit orchards.
ROBERTSThank you for your call. Yeah, it does seem that there are attempts at least to have some local produce. There's a lot more farmers' markets around, that sort of thing, but they're not exactly easily accessible for low-income people.
BRANTLEYNo, they're not. I mean, in terms of low-income neighborhoods, usually accessibility to fresh produce is very, very difficult. It's usually access and affordability that they can't come up with that. But the issue is that everyone should have the right to eat. It's -- food has become a commodity rather than a necessity. And the issue is that if the rain doesn't rain and the sun doesn't shine, nobody eats.
BRANTLEYAnd, you know, it's give us this day our daily bread, not give me my daily bread. But it's that sharing and coming to the table and making sure that everyone can have food. One interesting point, back in -- during World War II, they were finding that the boys were not -- didn't have stamina to fight. And that's why the School Lunch Program began. And it began because they were undernourished.
BRANTLEYAnd so the strength of a country is certainly the health and well-being. And food is essential to that part of it. And to deny that to people -- 50,000 manufacturing jobs -- plants have closed in this country in the past 10 years. Eight million jobs have gone away. People cannot find work, or they're working two and three jobs. So to put food on your table in these days is a very difficult thing to do.
ROBERTSWell, you mentioned School Lunch. There's also the School Breakfast Program. Are -- is some of the spike you're seeing because it's summer and kids aren't able to eat in school?
BRANTLEYThat's a big issue in terms of when school is out. There is a summer feeding program. It's an underutilized program. And I think people are trying very hard. I know we -- up on our website, we have the places that people can go to encourage students to go there for -- actually, you can get breakfast and lunch at those sites. But it's a very underutilized program.
BRANTLEYAnd so the pressure on our agencies becomes even almost greater in the summertime than in the wintertime because people cannot -- they have to feed their children when they were getting food at school.
ROBERTSThat's Lynn Brantley, president and CEO of the Capital Area Food Bank. We're also joined by Sophie Milam, senior policy counsel for Feeding America. Thank you both so much.
ROBERTSWhen we come back, how to make your own dollars at the grocery store go further. You don't have to sacrifice taste in order to get some affordability. Jodi Balis would tell us how after this quick break. I'm Rebecca Roberts, sitting in for Kojo Nnamdi.
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