I don't really understand how a grocery store can afford to sell a ham the size of a watermelon for less than $8. But that's what it was fetching last Saturday, when I was fishing through the teeming meat section of a local retail outlet.
I thought I might buy one. But I was shopping light that day, and already had some meat in my basket — two tenderloins, which I'd bought for the ridiculously cheap price of $2.50.
Intuitively, you know this can't go on, and shouldn't. The system is an unsustainable mess when food is that cheap, and inevitably leads to huge subsidy programs in which governments have to bail out farmers.
But if you look a little closer, in Canada, cheap food seems poised to continue on for the foreseeable future. Unlike some countries, food riots are unlikely here because grocery stores are fighting their own fight –that is, the fight for customers.
Canadian grocers are in the throes of a fierce and chronic price war that is absolutely hammering their profits. Established chains have lost an estimated $900 million over the past two years, says senior market analyst Kevin Grier of the George Morris Centre, a Guelph-based agricultural policy think tank.
In a new report on the state of the grocery industry, Grier notes non-traditional big-box food retailers, such as Wal-Mart, are gaining ground. At the same time, Loblaw is trying to reassert itself back into the market. And Sobey and Metro/A&P are fighting hard for market share, too.
"Looking specifically at the consumer price index for food in Canada," Grier says, "it is not clear there is a food-pricing problem."
Amen, brother. The problem is $8 ham, $2.50 tenderloin, and $1.20-a-litre gas.
Some of the people who feed us are going broke, forcing huge sell-offs of their herds, while Big Oil continues its careless legacy of ripping us off and destroying the environment. More and more, food and energy are being mentioned in the same breath, because in Canada farmers can't grow food without using a lot of energy for crop and animal production, as well as animal housing.
That's why the agricultural sector is getting edgy about accusations that it's mainly farmers who are causing rising food costs globally.
Last week, the Canadian Federation of Agriculture blew its stack. President Bob Friesen, a turkey farmer from Manitoba, couldn't sit still anymore, amid the wide spectrum of opinion — and reporting — that attempted to simplify higher grain prices and challenges to food stocks by vilifying farmers.
Farmers are doing what they've been asked to do. Besides growing corn for food and animal feed, they're supporting our insistence on biofuels. Canadians showed concern for the environment, so governments responded with renewable energy policies based, at least in the short term, on farmers growing conventional crops such as corn for biofuel stocks.
Ideally, more time would have gone into planning and implementation. But with Big Oil gouging us daily, and governments unable or unwilling to stop it, they had to respond quickly for political and environmental purposes.
Debates rage about the true benefits of biofuel, but even if it's not much different than petroleum, I think a lot of people would rather direct their money toward farmers than Big Oil.
But maybe I'm wrong. The backlash against agriculture based on the food price misconception surprised a lot of farmers who thought the public understood they'd been making peanuts. Friesen and others tried to remind everyone about other forces' strong influence on grain prices, such as market speculation, changing dietary trends in emerging economies, and recent global weather patterns.
It's complicated. And like other farm messages, there's limited patience for them, especially when people around the world are rioting for food.