Econ 101: supply and demand, why grocery prices are so high...

[Tyler Durden]

We all know from Econ 101, the where supply and demand meet, that sets the "market price".

Because our federal .gov is subsidizing the demand side for groceries through various programs like WIC, SNAP, EBT card, food stamps, Illinois link card, grocery prices are artificially higher than they should be.

If I could wave a magic wand and POOF! all government "food stamp" programs went away, in about a month you would see noticeable drops in groceries prices.

So not only are you getting dinged once on your income taxes to pay for these leeches, you get dinged a third time at the super market's cash register because of the artificially inflated demand/higher grocery prices.

As a slight tangent, this propped up demand trickles down and props up corn, wheat, and soy bean prices.

[MikeBjerum]

There is also the side that food prices were kept artificially low for decades through the farm programs.  We did not have farm programs to boost farm economies.  We had government programs to manipulate the supply side and maintain low pricing on store shelf.

[tombogan03884]

Those farm subsidies are still in place.
The two pretty much off set each other.
You also have to take into account the fact the money doesn't actually have any real value.

[MikeBjerum]

The farm subsidies are not what they were, and they don't  control what they did.  There is no grain reserve - By the time the harvest comes the bins are empty.  There is no balance of crops - Market dictates what is planted regardless of what is needed.  Most subsidies are based off conservation and removing land from production.  Subsidies are given in a way that most of the cash passes through to suppliers (farmer is just a conduit to support higher machinery, seed, fertilizer and chemical costs).

In the past, program payments were used to manipulate how much of each crop was produced, and how much was maintained in reserve for bad years.  Farmers maintained reserve storage of multiple years of grains to protect against failures or shortages.  Much of the subsidy was tied to facilities needed to store and maintain product, improvements in practices, and to offset acres not in production or diverted to less profitable crops.

When we gave up our reserves is the same time we saw feed grain prices double and triple in price, and a major shift away from human grade crops.