The future of our foods, the impact of weather

June 10, 2011

How the current weather conditions are affecting the prices and supply of our foodstuffs.

There is little doubt in the minds of most of America’s farmers that the past few months of tornadoes, flooding and earthquakes in our country and around the world, have had a devastating impact on our food supply.
The extreme weather has killed hundreds of people, tens of thousands of animals, and has damaged millions of acres of our farmland. According to the American Farm Bureau Federation (AFBF), Arkansas alone has lost about one million acres of cropland, and the flooding along the Mississippi River has hurt over 3.5 million acres. And according to the National Oceanic and Atmospheric Administration this year’s hurricane season, which officially began on June 1st will have “above normal” activity.
The AFBF reports that about 40% of our nations rice crops; two million acres of cornfields and the planting of soybeans and wheat have all been affected. And that translates to even higher prices on the shelf; which for many shoppers could be frightening. The UN Food and Agriculture Organization’s World Food Price Index, which tracks 55 food commodity prices reports that over the past ten months prices have already risen 9 times.
So what’s next? Can we afford to just continue to raise prices and bear the brunt of anguish and complaints from shoppers? Absolutely not. We must be more proactive in efforts to explain exactly why prices are rising, and that based on the current forecasts, they will rise even further. In order to build trust and customer confidence, we must take the time to explain that after almost a year of constant rain in Colombia and other coffee producing regions, coffee bean crops have been devastated; the result according to the U.S. Department of Labor is a one-pound can of coffee now retailing for $5.10 versus the year ago average price of $3.64. We must also offer recommendations on how to combat these inevitable rises – in the case of coffee, for example, being sure to brew the exact amount you consume, using ¾ of a tablespoon per cup rather than a heaping one and even the proper way to store coffee to insure the flavor and freshness last.
One could argue that these explanations should be the responsibility of the news media, however, it is our view at The Lempert Report that supermarket retailers should actively communicate why prices go up to stave off the outrageous headlines that typically paint both food brands and supermarkets as those who are profiteering. Truthful, timely and common sense language will go far to boost credibility.
A recent Newsweek magazine cover story declared the new normal is “weather panic” – not necessarily a trend our industry can, or should, embrace.