The farm price roller coaster isn't often reflected in the cost of produce at the retail level, according to a column by Fresno County freelance writer Don Curlee. His article, based on research reported in the UC Giannini Foundation of Agricultural Economics Update newsletter, appeared in Capital Press yesterday.
While retailers are mostly unresponsive to farm price changes, they are more apt to respond to increases than decreases, Curlee noted, adding wryly, "Not surprisingly."
The research report, written by Ph.D. candidate Richard Volpe, said food prices at the farm level shot upward in 2007 and early 2008, followed by a sharp decline in late 2008 and 2009. Economists are ruminating on the wide variety of possible causes - e.g., energy costs, emergence of biofuels, the weak dollar - but they haven't reached consensus.
Through it all, retail prices remain significantly more rigid, perhaps for consumer and grocery store chain convenience. Curlee seems to suggest that consumers are ready for - and may even be entertained by - grocery bills that reflect the ebbs and flows commodity prices.
"When consumers play farmers' market or roadside stand bingo they experience significant price upturns and downturns regularly," he wrote. "Supermarkets might be missing a bet by taking some of that exhilaration out of food shopping."