Lynne Stevens
Every day, it seems we go to our local grocery store and see higher prices and shrunken boxes that are tall – but skinny.
We buy a box and open it to see the bag is half-full; only to be told it is sold by weight not volume. When a small volume is unnecessarily put in a big box, I feel it is misleading. For a family with two children, that means cereal servings must be smaller – or you must buy more.
The term is “shrinkflation.” While good for the waistline, the size of most candy bars are only a shadow of their former size. My goodness, look at the price of that little chocolate bar! Even a tiny bottle of generic eye drops has gone from under $2 to $4.
Families and retirees are hurting here in our small town. Are we a voice in the wilderness?
Our representatives tell us they will get these prices under control, but there are some things Congress and presidents must deal with when the public starts clamoring about high prices.
Similar to oil prices, the grains that make cereal –for example – are sold and priced on international markets. That is why the farmers are having such a difficult time. These markets have not been stable in part due to tariffs and other policies. Much of American grain is purchased by other countries or by the government for domestic food safety nets.
Farmers plan on all these markets for each planting cycle. They get in trouble when they have too much product and disappearing markets. When government is working properly, it creates a stable environment for the production of raw food supplies. Not an easy task.
An important part of understanding how prices of food and other things rise and fall is demand. Policies focused on increased demand – without the capacity to increase supply – is a recipe for inflation.
The Federal Reserve walks a tightrope to balance demand and supply to prevent inflation using interest rates. Lowering interest rates quickly can create too much demand, causing prices to rise.
Have you ever seen a popular product out-of-stock; yet, when it is back on the shelf, the price is up? That supplier had to hire more workers to accommodate making more product. He had to pressure raw material suppliers for the increased raw material that is needed. The raw material is now in shorter supply due to higher demand.
Bottom line, we pay more.
In a free-market society, government has its tools – but getting those tools into effect takes time.
Retail pricing is a complex web of influence. Stable markets and encouraging competition can be achieved – but where is the plan? Campaign slogans about lowering prices is hot air without disclosing a plan. The best plans are predictable and competitive markets with enforceable laws preventing noncompetitive corporate mergers.
Our state and local representatives need to come through for us now. Our incomes struggle to support these prices.
Lynne Stevens writes a bi-weekly column for The Graham Star. She can be reached via email, geminga@mailfence.com.