Thursday, March 27, 2008

Higher Food Prices may be Healthy

An article by Sylvain Charlebois in the Globe and Mail this week discusses how higher food prices may be healthy. I can't link to the entire article since it is locked to subscribers so I'll do my best to summarize it. Basically, North America has not felt the impact of higher food prices yet because such a small proportion of spending, 9%, is on food. The food market currently produces cheap food with low nutritional value since consumers have decided to spend money elsewhere. As food prices inevitably rise, so will consumers scrutiny of what they buy. The last few paragraphs from the article:

Yet, if a consumer were obliged to pay more, he or she would ultimately care more about the nutritional value of the foods purchased. It's as simple as that. Consumers these days unthinkingly seek low prices, and don't seek good and safe foods as a matter of course.

As prices increase in time, consumers will need to acclimatize to this new reality. The cost and the value of calories will become more important to them and they will gauge these factors more judiciously.

In turn, with more wealth, the food industry will be better able to contribute to the common good. Assuring the quality of food products, especially their safety and nutrition levels, should be an increasing strategic priority for governments, the private sector and international trade agencies.

Ultimately, with progressively higher food retail prices, consumers' physical wellbeing can only improve.

I agree with the premise of his position and I look forward to watching this play out over the rest of this year. I think other factors will materialize as well. Locally produced goods will become more price competitive as transport costs increase for everything else. Rising corn prices might translate into costlier high fructose corn syrup and increase the prices on foods containing them. Accordingly, consumer demand will shift with the prices and healthier options will become more appealing on price. As gas prices rise convenience foods will be less necessary because nobody can afford to drive anywhere. However, consumer patterns are usually tied to prices and if gas prices drop then people may go back to the bad habits. Only time will tell.


BBC said...

I don't buy a lot of food, especially prepared foods, other than cake mixes when on sale.

Mostly I make most meals from scratch, making your own biscuit mix is half the price of buying biscuit mix for example.

And there isn't a lot of weird crap in it.

Eco-Thinker said...

since the additive filled cheap foods will still be the cheapest offerings at the market, the families conserving dollars will still ultimately buy the cheap unhealthy foods.

BBC said...

Not that weird crap bothers me, I'm just visiting this planet in this body anyway. Never mind, statements like that are over most people heads.

Hank Dunckel said...

I have for the last couple of years look for quality in food and not so much quanity. Paying a little bit more and getting some thing that is good for you pays in the end with better health.

Would love to be better able to find out were this stuff comes from in the world. Foods are mix togather and haven't a clue as to were it was imported from, as example Tomates and the label has 5 different possible countries listed - BUT DOESN"T TELL WHICH ONE hum.. I wonder why?

Hank Dunckel
Google Me Soon

FeButterfly said...

Eco-thinker, I think that additives will become more expensive along with food in general. Unprocessed foods, if that is a category, may not experience the same price increases as they need transport and not various inputs, like corn products. My theory is that the processed food prices will increase faster than others and combined with the premise that higher prices lead to more thoughtful decision making then people will need to get more out of their food dollar and choose healthier.

BBC, you always have something great to say and I love having you drop by as regularly as you do.

Hans, I feel the same way. I did find out that a lot of the apple juice concentrate in North America is from China. I wouldn't eat Chinese apples so why would I drink the juice? The hard part is that it may still say made in the USA/Canada but I rarely see the origin.