Rising Food Prices. NCSL Annual Meeting July 25, 2008

Transcription

1 Rising Food Prices NCSL Annual Meeting July 25, 2008 Ellen Vollinger Food Research and Action Center (FRAC) 1875 Connecticut Avenue NW Washington, DC x3016

2 Factors in Higher Food Commodity Costs Stronger global demand for food Increased U.S. agricultural exports resulting from stronger demand Weather-related production problems in some areas Increased use of some food commodities for bioenergy uses. Source: Statement of Dr. Ephraim Leibtag, USDA s ERS, before House Education and Labor Committee, 7/9/08, posted at

3 Impact on Low-Income Consumers Rapidly rising food prices hit all consumers But especially hard on lower income consumers Exacerbate hardship in current economic downturn

4 Hunger in U.S. and States 35.5 million people in U.S. live in households that face a constant struggle against hunger For state-by-state data on hunger/food insecurity and participation in federal nutrition programs, see FRAC s State of the States report at

5 Household Food Purchases Average family spends 7% of income on food at home Family at poverty line may need to spend up to one third of its income on food. Rapidly rising prices hit those with low income and no discretionary income

6 Recent Price Changes Cost of food increased by 8.7% in the first half of 2008, compared to just 5.6% in all of 2007 From June 2007 to June 2008 cost of food at home rose 6.1% Some food items experienced double-digit increases in price over that time: cheese (14.7%); eggs (23.2%); bread (15.9%) Mix of food that low-income people buy has increased in price even faster From June 2007 to June 2008, the cost of the Thrifty Food Plan rose by 8.5%

7 Impact on Access to Healthier Food Rise in food costs even more dramatic for healthier, more nutritious foods (such as lean meats and vegetables). These food items increased by 20% over the past two years, according to University of Washington researchers (study by Adam Drewnowsky and Pablo Monsaivais published in the December issue of the Journal of the American Dietetic Association) In June 2008 the cost of fruits and vegetables increased 2.8% in just one month

8 Food Stamps Not Going as Far The Thrifty Food Plan is USDA s estimate of what it would cost to purchase a minimally adequate diet. The TFP market basket priced in June is the basis for maximum food stamp allotments for the following federal FY. The maximum monthly food stamp allotment for a family of four for FY 2008 is $ amount needed to purchase TFP in June but $46.20 short of the amount needed to purchase TFP in June 2008

9 Families Facing Difficult Choices A CNN poll in March 2008 found many Americans already were starting to cut back on spending 30% said they already were cutting back on food and medicine 57% worried they would start cutting back soon Nearly half said they were cutting back on energy costs

10 Further Food Price Rises Predicted In its first estimate for 2009, USDA said food prices would rise by 4 to 5 percent for the year, led by red meat and poultry, which account for 10 percent of food spending. For this year, the biggest price increases are forecast for eggs, up 14 percent, cereals and bakery products, up 9.5 percent, and fats and oils, up 12 percent. In that group, cereals and bakery products are the largest component of the food basket, 7.4 percent of overall spending. All would moderate in 2009, rising at 4 percent or less. Source: Pricey meat to boost food prices 4-5 pct in '09-US, by Charles Abbott, Reuters, 7/23/08

11 National Nutrition Safety Net Food Stamps School Meals Summer Food CACFP WIC Emergency Feeding (TEFAP/CSFP)

12 Food Stamps Food Stamps are first defense against hunger Provide access to nutrition for needy people Benefits are 100% federally funded; administration shared expense Each $1 in federal food stamp benefits generates nearly $2 in local economic activity Program responds to changes in need, whether due to economy or disasters

13 Food Stamp Cases Up In April 2008 Food Stamp Program caseloads hit a record 28,063,229 persons participating was highest level other than for the November 2005 period in which many victims of Katrina, Rita and Wilma were served Reflects growing need as well as improved access

14 Caseworkers Stretched CT: "I was at a meeting last week of the Connecticut Food Policy Council where I heard that there are 8,000 more food stamp cases in Connecticut this year than last. We know that this is because of the economy and people losing jobs. The food stamp program is a critical part of our nation's safety net and an important help when a family is going through difficult economic times. The problem is that the state has a hiring freeze, meaning they cannot hire more workers to process these applications. So workers who already had 800 or so families on their caseload now have to handle even larger caseloads. Can't we lift the hiring freeze just for these workers or transfer workers from another area to deal with this?" Source: "Food Stamps in Connecticut," by Foodshare President Gloria J. McAdam, 7/14/08, posted at

15 Food Stamp System Investments State and county offices face challenges serving growing number of needy people and doing so timely FL: new applicants pushing DCF'S call center to the max article.html/familie s_food.html Federal dollars are available to match state investments in more caseworkers

16 School Meals Cost of preparing school breakfasts and lunches rising Preliminary School Nutrition Association (SNA) survey results Cost of preparing a school meal will jump 30 cents per meal per day per child to national average of $2.88 National impact of $1.5 billion estimated (based on 5 billion lunches served last year) Source: Statement of Katie Wilson, SNA President-Elect, before the House Education and Labor Committee, 7/9/08, posted at KatieWilson.pdf

17 SNA Cites School Meals Prep Cost Factors Costs for foods to meet dietary guidelines are up Not uncommon to pay 5 to 6 cents more for single serving whole grain bread rather than white bread As fuel costs increase, more school food service programs being charged by local schools for indirect expenses of running school (e.g., utilities and trash removal) Fuel costs are also increasing transportation costs and some food distributors are adding surcharges for fuel expenses Other factors include labor and health care costs, residual effects of beef recall, and lack of uniform national interpretation of Dietary Guidelines

18 SNA Reports Options School Districts Consider 75% of SNA respondents are raising price of school meal for paying students 62% are considering reducing number of employees 69% are dipping into financial reserves (diverting capital improvement reserves for day-to-day operations) Some are purchasing food earlier and in bulk Some are downgrading menu selections to less expensive options (e.g., spaghetti in place of lasagna)

19 Summer Food and Afterschool Snacks Costs for many staples in SFP (such as milk, bread, cheese) up disproportionately, making it harder for providers to break even Federal reimbursements inadequate Nassau County, NY will cover 21% of cost of operating SFP Providing nutritious snacks for 68 cents or a healthy lunch for $2.98 is an enormous challenge in our area and elsewhere not close to the sources of food. Source: Statement of Family & Children s President and CEO James J. Hartnett, before the House Education and Labor Commitee, 7/9/08, posted at JamesHarnett.pdf

20 CACFP Child and Adult Care Food Program (CACFP) provides high quality nutrition and learning experiences for 3 million children each working day Rising food prices have increased need for CACFP, decreased access to CACFP and threaten to reduce meal quality Lack of mid-year inflation adjustment in CACFP reimbursements a problem Source: Statement of Paula James of Contra Costa Child Care Council and California CCFP Roundtable and National CACFP Forum, before House Education and Labor Committee, 7/9/08, posted at

21 CACFP Front Line Stories 25% increase in milk bill for child care center serving 150 children from very low income Latino community Food related supply costs up and fuel charges on deliveries Our fiscal people say that we will subsidize CACFP reimbursements to fill a short fall of $100,000 statement from director of Head Start and Pre-K programs serving 640 children in school year Source: Statement of Paula James of Contra Costa Child Care Council and California CCFP Roundtable and National CACFP Forum, before House Education and Labor Committee, 7/9/08, posted at

22 WIC Participation in the WIC Program is increasing at the same time that the costs for WIC food are rising. For FY 2009 it is estimated that a WIC appropriation of $7.043 billion will be needed to serve an average monthly caseload of 9.13 million That would be an increase of about $1.4 billion over the FY 2008 level. In April 2008, WIC served 8.7 million women, infants and children.

23 Emergency Feeding The Emergency Food Assistance Program (TEFAP) and Commodity Supplemental Food Program (CSFP) are important supports for emergency feeding Costs of food and transportation combining to increase need for and cost of delivering emergency food services According to America s Second Harvest The Nation s Food Bank Network survey of food banks (April 28-29, 2008), 100% food bank respondents experienced an increase in number clients served in last year

24 Food Banks Cite Factors in Increased Demand for Emergency Food Rising cost of food 90% Rising cost of fuel 90% Rising unemployment 29% Inadequacy of food stamps 29% Mortgage or rent issue 26% Rising underemployment 24%

25 Policy Responses Farm Bill contains significant ten-year investments in nutrition ($ billion) Especially some improvements in allotment levels and asset rules in the Food Stamp Program and extra money for TEFAP NCSL partnered with the anti-hunger community in securing these important investments But more federal investment in nutrition is needed to address rising food costs, boost economic activity, and cushion the blow on struggling families.

26 Federal Outlook Possible economic stimulus II package, FY 2009 Appropriations and/or FY 2008 Supplemental Appropriations Bills WIC Program appropriation for FY 2009 needs to reflect growth in need and food prices Temporary increases in food stamp benefits make sense. Each dollar in federal food stamp benefits generates nearly twice that in economic activity. See postings at Semiannual inflation adjustments in nutrition programs would better reflect food price changes Child Nutrition and WIC Program Reauthorization ahead in 2009 is opportunity to address gaps in reimbursement rates, access and meal quality

27 10 Steps for State Legislators To Help Constituents Cope with Food Prices 1) Download NCSL s toolkit Bringing Legislators to the Table--Addressing Hunger and Nutrition in America posted at Table.htm 2) Convene stakeholders. Enlist private sector as well as nonprofit partners in community anti-hunger efforts 3) Help connect constituents with nutrition safety net programs, including by putting information on Web sites, in newsletters, and other media. E.g., Jehlen: Call if you need help paying for food,: Letter to the Editor from State Senator Pat Jehlen (MA), Somerville Journal, 6/27/08, posted athttp:// /Jehlen-Call-if-you-need-help-paying-for-food

28 Steps 4) Visit nutrition program sites such as WIC clinics, food stamp outreach at food pantries and, farmers markets that take EBT, summer food programs 5) Promote Farm Bill implementation of nutrition changes October 1, 2008, including rebranding FSP to Supplemental Nutrition Assistance Program (SNAP) or state specific name 6) Advocate for federal responses (economic stimulus, appropriations and Child Nutrition Reauthorization) E.g., submit comments to USDA on CN reauthorization (see info posted at usda)

29 Steps 7) Conduct hearings on hunger, food price inflation, and nutrition programs 8) Use legislative oversight function to get your state to take options that maximize receipt of federal nutrition dollars 9) invest state money to fill nutrition program gaps in access, adequacy and staffing/systems 10) Take the Food Stamp Challenge and help educate your community. See toolkit posted at

30 Contact For more information, go to Contact: Ellen Vollinger, FRAC Legal Director