Tuesday, July 15, 2014

Getting Ahead of Food Prices

I read recently that for some families, food prices have doubled in the last few years. I believe it. I don't have figures of our own family, but I do know that food has taken a disproportionately larger and larger percentage of our money each year. It is the fastest growing expense.

Even the national news outlets are coming around. See here, here, and here.

These are only gonna keep on climbing.

So with that, I believe there are 4 major things that influence food prices (listed after the jump), and none of those are in my control.

What IS in my control is my land, time, energy, and effort to produce my own food.

First things first: what affects food prices at the grocery store?

Gas prices. Food is grown and transported an average of 1,500 miles from farm to table (gives "farm to table" a new meaning, huh?). At 7.2 miles a gallon, a truck goes through 208 gallons of diesel to deliver those chicken nuggets to Walmart. As the cost of gas increases, this trip gets more and more expensive. Guess who pays the difference in the end?

Weather. The Calformia drought this year, and the southwestern droughts last year have shot the prices of beef and all things Cali way up. Look for almonds, grapes, oranges, apples, and rice to climg even higher. Rain dance, anyone?

Disease.When half the farm dies from a virus, the farmer charges more due to A) the sudden scarcity of the product, and B) to operate at at least a break-even. Such is the fate of pork prices in the U.S.

Wages. This one gets lost in the discussion, for the most part, but food is an industry. Industries survive and grow by bringing in more than they put out, then taking the surplus (called "profit") and funneling it back into the industry to create more output. This results in even greater input, and so on. A very significant chunk of that output is in wages for food labor. Food inspectors, packagers, handlers, pickers, growers, farm hands, herdsman, advertisers, R&D folks, and everyone else who goes into creating a successful food enterprise needs to get paid at the end of the day. These wages have remained relatively flat recently, and pushes are to underway to turn this upside down. Of course, raising minimum wage would be disastrous, as this always leads to massive unemployment and inflation - making food even more expensive.

So with my general lack of control over oil prices, salaries, one-celled organisms, and the global climate, I face a few choices when looking at how to get ahead of food prices. And by that, I mean keep the percentage of my income I spend on food either constant or lower than it is now - e.g., spend the same or less on food going forward.

One, I can look for a better job to even out the balance.
Two, I can change my eating habits to be less expensive.
Three, I can produce my own food to avoid the spiral.

Is there a "take a nap" door?

I choose door number 3.

Producing food on my land allows me to create a steady supply, independent of the Big Four influences that affect how much I pay for it. I'm working to design my production system so that very little money goes into it after an initial investment. Things like mineral blocks, replacement equipment (brooding lamps, halters, and the like), and AI services are expected. But with steadily producing cows, sheep, pigs, chickens, bees, and gardens (and eventually, fruit and nut trees), I should be able to lower the actual cost of my food now, and keep the percentage I spend in the future smaller than it is today.

Will I ever get to 100% food independence? Can I grow 100% of everything I consume from the land?

No, I don't think that's reasonably at the moment. A lot of infrastructure needs to be built and a lot of knowledge obtained before I can reach that level. Plus, I'd have to give up coffee.  :(

But producing even HALF of what I eat from the land will be a huge economic boost for the family. That would make me less susceptible to fluctuating prices, and more able to weather economic storms that if I'm totally dependent on the grocery store like most Americans.

Getting ahead of prices to where I don't see them affecting me is the first goal.

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