Your Survival Guy wants you to save til it hurts. That means putting off superfluous spending and instead putting that money away for retirement. But it’s hard to save til it hurts when it just hurts to save, at all. Rising prices make saving much harder on Americans, and perhaps it’s been most apparent at the grocery store. At the Cato Institute, Scott Lincicome discusses the rising cost of food and the causes of the trend. He writes:
Americans are concerned about grocery prices—and for (mostly) good reasons. Yes, as we discussed in February, consumers here still—even after years of inflation—spend a relatively low share of their budgets on groceries as compared with their counterparts abroad. But that doesn’t mean the last few years have been easy for U.S. grocery shoppers. As the chart below shows, prices at your local supermarket are up 25 percent since 2020:
This trend, as Bloomberg notes, can weigh heavily on our views of the economy (aka “consumer sentiment”) because food is an obvious necessity and because—unlike a house or a car—we buy groceries all the time: “Americans’ regular trips to the grocery store—three times a week for the average US household—are a powerful driver of economic discontent, constantly reminding consumers of the higher cost of feeding a family.” It’s thus no surprise (or at least it shouldn’t be) that, even after several months of moderating food prices, grocery shopping remains at the top of Americans’ list of inflation worries:
It’s also not surprising that this has become a major theme of the 2024 presidential election, with each side pointing fingers at the other. On one side you have Donald Trump blaming Joe Biden for the grocery situation (and, in typical fashion, wildly exaggerating the actual impact), while Biden’s been furiously trying to blame it all on “greedy corporations” (and adding that things would be even worse if his tariff‐loving opponent were in charge). In Congress, dutiful Republicans and Democrats are parroting these claims to push the candidates’—and their own—case before American voters.
For all this talk, however, it seems few people in Washington are actually interested in lowering U.S. grocery prices. In several recent cases, in fact, they’ve been actively trying to increase them by restricting available supply.
Recent Efforts to Increase U.S. Food Prices (No, Really)
Let’s start with beef, the price of which has increased by more than 30 percent since 2020. Last December, the United States Department of Agriculture (USDA) announced—after conducting two onsite health and safety audits in 2021 and 2022—that the United States would resume allowing fresh beef imports from Paraguay, a relatively small player in the global beef market. (Imports had been banned years ago because of concerns regarding foot‐and‐mouth disease, but Paraguay has been FMD‐free for more than a decade.) This new competition apparently didn’t sit well with 13 U.S. senators from beef‐producing states, so they sponsored legislation to override the USDA decision and ban all Paraguayan beef from the U.S. market. The resolution passed the Senate in March by a depressingly lopsided 70–25 vote, despite strong White House resistance in part on national security grounds. (Paraguayan beef exports had been hit by Russia and China because of the government’s position on Ukraine and Taiwan, respectively.) As Roll Call notes, politics—not science—played a big role in the Senate: “Sen. Jon Tester of Montana, one of the most vulnerable Senate Democrats up for reelection this year, sponsored the resolution,” and “Tester’s resolution has some influential lobbying clout behind it, including the American Farm Bureau Association and National Cattlemen’s Beef Association.” (They, of course, applauded the vote.)
Of course, importing beef from a smallish producer like Paraguay wouldn’t be a magical cure for skyrocketing American beef prices, but that also means the imports present a tiny competitive threat to giant U.S. producers. And restricting even small supply additions at a time when Americans are struggling to pay their grocery bills makes no good sense. Every little bit helps.
Next, there’s shrimp, which has actually experienced declining prices since 2020—thanks in large part to abundant imports. That foreign competition, however, angered U.S. shrimp producers, who petitioned the government in October for new “trade remedy” (antidumping and countervailing duties) restrictions on imports of frozen shrimp from Ecuador, Indonesia, India, and Vietnam. Those investigations are now underway, with the Commerce Department recently announcing preliminary duties on the Ecuadorian and Indonesian imports—restrictions that, unsurprisingly, politicians from shrimp‐producing Gulf states have vigorously supported. As we’ve discussed, these cases almost always result in new import taxes that stick around for years, if not decades, and will inevitably increase the price of shrimp at your local supermarket—as they always do.
Finally, we have tomatoes, which have fluctuated in price since the pandemic began but have gotten more expensive since last year. Here, Florida tomato growers have been working for months to get the Biden administration to increase tariffs (antidumping duties, again) on Mexican tomatoes—part of a long‐simmering dispute, suspended in 2019 via a government‐to‐government agreement, over the bilateral tomato trade. The Florida growers—and their congressional friends (almost 60 of them!)—have long opposed that deal, which if terminated could cause U.S. tomato prices to increase by 50 percent. Recently, a U.S. court found issue with the Commerce Department’s handling of the case—a decision that the Florida growers promise to fight, too.
Action Line: Is it any surprise that government involvement has had a detrimental effect on consumers and only really helped special interests? Remember Reagan’s nine most terrifying words in the English language? “I’m from the Government, and I’m here to help.” As Lincicome explains above, all this government “help” seems to have made things worse. Click here to subscribe to my free monthly Survive & Thrive letter.
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