Knowing how a very small fraction of the actual price we pay for food in this country is actually due to the cost of food itself, I was intrigued by a HuffPo article this week with the somewhat sensationalist title of “Rising Food Prices Intensify Poverty, Hunger In US And World,” which began as follows:
“Between October 2010 and January 2011, the Bank’s food price index increased by 15 percent (…). As a result, since June 2010, ‘there has been a net increase in extreme poverty of about 44 million people in low- and middle-income countries.’ America isn’t immune from the trend. According to Gallup polls conducted between 2006 and 2008, 16 percent of people in the Americas have gone hungry due to finances. And the trend of rising food prices is going to push more and more families into that category.”
Misleading Claims
There are two huge leaps here. The first is to compare figures from 2006 with figures from 2008. Not only do these figures compare a period of very cheap food with a food crisis comparable to what is happening now, those figures are also three years old. In other words, while they may tell a good story, they tell us nothing about what has been happening in the last few months.
The second leap is to talk about the percentage of people in the Americas — that is, North, Central, and South America — rather than the percentage of people in America. Including Central and South America artificially inflates the claim about the percentage of people falling into poverty in the US, since many countries in Central and South America have much higher proportions of people living on the margin of poverty than the US does. Indeed, in those countries, people spend a higher share of their household budget on food than we do in the US.
Mistaken Claims
The article then goes on to state that, according to the US Department of Labor (DoL):
“Wholesale food prices rose by 3.9 percent in February — the sharpest increase in more than 36 years.”
In fact, if you look at the DoL’s actual numbers, food prices only increased by 2.3 percent… over the last 12 months! And the 3.9 percent figure — which has been reported elsewhere — is also a last-12-months figure, not a one-month change.
Is Fecit Cui Prodest?
The article further notes that 54 percent of Americans are “very or fairly concerned or slightly worried about being able to afford food at some point in the next year.” But this is according to a survey commissioned by Tyson Foods. In this case, it is good to ask yourself what Tyson Foods wanted to get out of that study. After all, if irrational expectations can cause a bubble in housing prices, they can probably cause a bubble in food prices, right?
When it comes to food, perhaps the HuffPo should stick to the really important stuff?
Misleading and Mistaken Claims About Food Prices in the HuffPo
Knowing how a very small fraction of the actual price we pay for food in this country is actually due to the cost of food itself, I was intrigued by a HuffPo article this week with the somewhat sensationalist title of “Rising Food Prices Intensify Poverty, Hunger In US And World,” which began as follows:
“Between October 2010 and January 2011, the Bank’s food price index increased by 15 percent (…). As a result, since June 2010, ‘there has been a net increase in extreme poverty of about 44 million people in low- and middle-income countries.’ America isn’t immune from the trend. According to Gallup polls conducted between 2006 and 2008, 16 percent of people in the Americas have gone hungry due to finances. And the trend of rising food prices is going to push more and more families into that category.”
Misleading Claims
There are two huge leaps here. The first is to compare figures from 2006 with figures from 2008. Not only do these figures compare a period of very cheap food with a food crisis comparable to what is happening now, those figures are also three years old. In other words, while they may tell a good story, they tell us nothing about what has been happening in the last few months.
The second leap is to talk about the percentage of people in the Americas — that is, North, Central, and South America — rather than the percentage of people in America. Including Central and South America artificially inflates the claim about the percentage of people falling into poverty in the US, since many countries in Central and South America have much higher proportions of people living on the margin of poverty than the US does. Indeed, in those countries, people spend a higher share of their household budget on food than we do in the US.
Mistaken Claims
The article then goes on to state that, according to the US Department of Labor (DoL):
“Wholesale food prices rose by 3.9 percent in February — the sharpest increase in more than 36 years.”
In fact, if you look at the DoL’s actual numbers, food prices only increased by 2.3 percent… over the last 12 months! And the 3.9 percent figure — which has been reported elsewhere — is also a last-12-months figure, not a one-month change.
Is Fecit Cui Prodest?
The article further notes that 54 percent of Americans are “very or fairly concerned or slightly worried about being able to afford food at some point in the next year.” But this is according to a survey commissioned by Tyson Foods. In this case, it is good to ask yourself what Tyson Foods wanted to get out of that study. After all, if irrational expectations can cause a bubble in housing prices, they can probably cause a bubble in food prices, right?
When it comes to food, perhaps the HuffPo should stick to the really important stuff?
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Published in Commentary, Food, Macro, Micro and Policy