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May-01-2008Food inflation hits families hard - Congress(topic overview)
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Schumer invited Reinwald to join the panel to offer first-hand insight into how small business owners and Long Island families are coping with the soaring costs. Reinwald has experienced 200% price increases for goods in the past sixteen months, and has been forced to raise prices in his bakery three times since last summer. He has also had to cut back on overage he would generally offer to soup kitchens, and fears future shortages will further cut into his business. Reinwald will be joined by U.S. Department of Agriculture Chief Economist Dr. Joseph Glauber, who will offer his assessment of the underlying causes behind the dire food crisis. He will also be joined by a representative from America's Second Harvest, the largest domestic hunger relief organization, and the President of the National Farmer's Union, as well as other food industry experts. [1] In the wake of across-the-board price increases of food and groceries in Nassau and Suffolk, U.S. Senator Charles E. Schumer today announced that he has invited Long Island bakery owner Richard Reinwald to testify this Thursday in Washington, D.C. at the Joint Economic Committee's hearing on soaring food costs.[1] Sen. Charles Schumer says he has invited Richard Reinwald to testify Thursday before the Joint Economic Committees hearing on soaring food costs. He is the owner of Reinwalds Bakery in Huntington. The hearing will focus on skyrocketing food prices and their impact on already-struggling families.[2]
At a hearing of the Joint Economic Committee today, USDA Chief Economist Joseph Glauber said USDA believes retail food prices will jump between 4 pct and 5 pct in 2008. That is potentially higher than the 4 pct rise last year, which was the largest increase in retail food prices since 1990.[3] 'Several key factors are shaping the current situation, including domestic and global economic growth; global weather; rising input costs for energy; international export restrictions; and new product markets, particularly biofuels,' Glauber told the committee. He also warned that reduced global stocks of farm commodities could force prices even higher than expected if droughts continue to reduce supply and record-high energy prices continue to increase the costs of processing and transporting these commodities. Despite this grim outlook, Glauber was more optimistic that prices would come down in the longer term, as capacity is expanded. 'The Department's current long-term projections indicate that retail food price inflation will gradually moderate over the next several years,' he said.[3] Glauber, the USDA economist, said the overall price increase in 2007 was the largest annual jump since 1990. He blamed it on worldwide economic growth, weather factors in parts of the world, restrictions on food exports and the relatively new biofuel industry.[4]
Joseph Glauber, chief economist for the Department of Agriculture, said that if biofuels like ethanol continue absorbing more U.S. crops, prices for soybeans and other staples will rise, including the grains used to feed livestock. He also stressed that poor weather conditions, increased demand for food in developing countries and higher fuel costs have greatly contributed to the price rise.[5] Reinwald blames part of the problem on incentives to raise corn to help produce ethanol at the expense of food crops. "We need to do more to protect our food supply," he said. Other factors driving up prices are global demand and poor weather in Australia and South America, which has hurt crops, Joe Sowers of the D.C. -based trade group U.S. Wheat Associates told Newsday in February. Some international food scientists yesterday recommended halting the use of food-based biofuels, such as ethanol, saying it would cut corn prices by 20 percent amid the world food crisis, the Associated Press reported.[6] The ethanol industry says ethanol and other biofuels account for just 4 percent of the price surge, while the Department of Agriculture says the figure is closer to 20 percent. Earlier this week a group of international scientists recommended halting use of crops for biofuel, saying it would cut corn prices 20 percent.[5]
"The anxiety over higher food prices is going to be just as widespread and will equal or surpass the anger and frustrations so many Americans have about higher gas prices," said Sen. Charles Schumer, who chairs the committee. Farmers and ethanol producers met in Washington Tuesday to try and defend the benefits of their industry, just as some lawmakers begin to reconsider the countrys heavy promotion of ethanol as an alternative to gasoline. Only four months ago ethanols promise to slow climate change and reduce dependence on foreign oil persuaded Congress to mandate a fivefold increase in its production by 2022. Farmers have responded to government incentives by setting aside nearly a quarter of their corn crop for ethanol production, up from less than 15 percent in 2005. This week two Republican lawmakers on Capitol Hill have already proposed curtailing ethanol policies, questioning the wisdom of using crops for fuel amid rising demand for food.[5] Schumer pointed to rising commodity and energy costs as the "main culprits" in driving up food prices. "High gasoline prices don't just raise transportation costs - they increase demand for gasoline substitutes, mainly ethanol derived from corn," said Schumer.[4]
Mr. Reinwald knows first-hand the extreme difficulty Long Islanders face as costs go up on all fronts. The hearing, entitled, 'How Are High Food Prices Impacting American Families?' will examine skyrocketing food prices and their impact on the pocketbooks of already-struggling families.[1] Reinwald, who will offer first-hand testimony on how rising food costs are affecting Long Islanders, is a third-generation baker and owner of Reinwald's Bakery in Huntington. 'Long Islanders are being hit from all sides by a weakened economy and record energy costs, and now they also have to worry about the soaring costs of feeding their families,' Schumer said.[1] HUNTINGTON (CBS) A baker from Long Island is on his way to Capitol Hill to testify at a hearing about how rising food costs are impacting families.[7]
Schumer, chairman of the JEC, called the hearing to determine how rising food costs are impacting American families, and what can be done to offer relief.[1] WASHINGTON ' Amid what many are calling a global food crisis, Senator Schumer will convene a hearing tomorrow to examine the impact of rising prices in America, as families and business owners across the country are seeing costs spike at the grocery store even as they rise at the gas pump.[8] Schumer, chairman of the committee, called the hearing to determine how the rising costs are impacting families. "I'm going to tell them about the explosive nature of the price increases we have suffered," said Reinwald, first vice president of the Virginia-based Retail Bakers of America. "I would like them to recognize the depth of the pain that the consumer is feeling."[6]
President George W. Bush said Tuesday in a Rose Garden address on the economy that the United States should increase ethanol use because of energy security and high gas prices. Reinwald, 55, a third-generation baker, opened his shop on New York Avenue in Huntington Village in 1988. To cut costs, he has accepted two resignations from his staff of 29 full- and part-time employees and looked for savings in utility bills and packaging. He cut daily production, but finally, he was forced to increase prices by 4.5 percent in February. He said with the rising cost of basics, staying in business is becoming a challenge. "I feel Reinwald's is now at a point where we are becoming a discretionary purchase," he said. "It shouldn't be that way.[6] Reinwald's Bakery, a landmark on New York Avenue, has seen a 100-pound bag of seminola flour jump from $32 to $72. For Reinwald, this has meant a double-digit increase in birthday cakes and since January, prices exploded up 100 percent.[7]
NEW YORK (CNNMoney.com) -- A joint committee of Congress on Thursday started scrutinizing the impact of rising food costs on middle-class families already stung by rising gas prices. [4] "The anxiety felt over higher food prices is going to be just as widespread, and will equal or surpass, the anger and frustrations so many Americans have about higher gas prices," said Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee.[4] Congress Joint Economic Committee met to discuss the causes behind surging food prices that have set off riots abroad and grocery store sticker shock in America.[5]
The Senates Homeland Security Committee has scheduled a hearing on the issue for next Wednesday. While nearly all experts say increased biofuel production has contributed to the run-up in food prices, there is little agreement on the scope of its role.[5] Glauber said that while biofuel production would likely keep corn and soy prices high, dairy and wheat prices will likely fall as production expands. The largest price increases this year will likely be seen in fats and oils, cereals and bakery products, and nonalcoholic beverages. Glauber said only these food products are expected to see price increases above 4 pct.[3]
WASHINGTON (Thomson Financial) - The U.S. Department of Agriculture (USDA) expects U.S. food prices at the retail level to rise even more quickly this year than they did last year, but sees food prices moderating in the coming years as farmers around the world expand capacity.[3] Americans spent an average of $1,926 on groceries per person in 2007, a 4.2% increase from the prior year, according to the U.S. Department of Agriculture.[4]
Dr. Joseph Glauber, chief economist for the U.S. Department of Agriculture, is expected to testify, as well as George Braley, senior vice president of America's Second Harvest and Tom Buis, president of the National Farmer's Union.[4] Mr. Schumer's panel will hear from the Department of Agriculture's chief economist as well as a major hunger relief organization and the National Farmers Union. In America, prices for goods such as bread, flour, and eggs have risen for months, prompting outcries from consumers already worried about a slowing economy.[8]
Schumer's office says the baker has experienced 200 percent price increases for goods in the past 16 months, and has been forced to raise prices three times since last summer. [2] Few feel more sting from skyrocketing food prices than Richard Reinwal, a third generation baker in Huntington. "While the customers understand, they are angry and frustrated. That's why we started the letter writing campaign and posters in the windows," said Reinwald.[7] At a White House press conference yesterday, President Bush said administration officials are "deeply concerned about food prices here at home."[8]
The hearing of the Joint Economic Committee, which Mr. Schumer heads, will be the first to examine the domestic effects of food shortages. It comes on the heels of an announcement yesterday by the U.N. secretary-general, Ban Ki-moon, of a task force aimed at averting "social unrest at an unprecedented scale" due to a food crisis. [8] Hearing focuses on impact of skyrocketing grocery prices on middle-class families.[4] Customers are trying to remain loyal, but it hurts. "Long Island families can't afford these prices, and I admit, they are ridiculous," said Reinwald. Reinwald headed to Washington D.C., where he will address lawmakers on Thursday.[7] Richard Reinwald said he has no problem admitting that some of the prices he has to charge to keep his Huntington bakery in business are ridiculous, but he feels bad about it. "It really hurts," Reinwald said.[6] Reinwald said since December, semolina flour has gone from $32 per 100 pounds to $72 per 100 pounds. He said rye flour is so scarce, much of it is imported from Europe. In two months, he has had to hike the price of a loaf of rye from $2.50 to $3.45 and the cost of a sheet cake for 40 from $52 to $70.[6] Corn prices have hit record average prices in the past couple years - as much as $4.50 a bushel compared to $3.04, according to Glauber.[4] American consumers should eventually see some relief from higher prices as foreign countries increase plantings for wheat and other crops, Glauber said.[5]
SOURCES
1. PressZoom.com - Global News Service - News and Press Release Distribution
2. NY baker to testify in Congress - NewsFlash - SiLive.com
3. USDA sees 4 to 5 pct rise in 2008 food prices, but moderating in longer term - Forbes.com
4. Food inflation hits families hard - Congress - May. 1, 2008
5. US economist says booming ethanol industry will keep corn prices at historic highs - International Herald Tribune
6. Huntington baker to tell Congress abouit rising food prices -- Newsday.com
7. wcbstv.com - LI Baker To Testify Before Congress On Food Prices
8. Schumer Sets a Hearing on the Global Food Crisis - April 30, 2008 - The New York Sun
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