Can Any President Lower Food Prices?

The Reality of Campaign Promises

How to make a bag of groceries cost a little less is on everyone’s mind these days. According to the Bureau of Labor Statistics, groceries are still 28% higher than they were in 2019, and food insecurity increased from 12.5% in 2022 to 13.8%.  I enjoy hearing ideas on how to bring prices down. In the face of an election, candidates have discussed methods for making a trip to the grocery store a little easier on the pocketbooks of Americans. But can any president really change the price of food? 

How Would a Ban on Price Gouging Work?

Reducing the cost of groceries by eliminating price gouging has been presented. It's unclear exactly how much price gouging is currently taking place, but we do know that many big corporations in the food sector are still recording substantial profits. Meanwhile, consumers continue to feel the pressure of inflated prices with little in the way of wage increases to support growing expenses. The continued imbalance suggests that these big corporations, operating with minimal competition, have enough power to control prices and consumers have little option but to pay up.

When Kroger and PepsiCo admitted to and defended their price gouging actions it fueled the idea that regulating grocery monopolies could have a substantial impact on consumer prices. Supporters of the move maintain that a ban would put a stop to gouging and hold large corporations who control big markets more accountable. Several individual states already monitor the antitrust dynamic and a federal policy would work to support state efforts with the backing of the Federal Trade Commission.

Opposing parties believe a ban would cross a line when it comes to free trade. Fluctuating prices are not necessarily abnormal, and while PepsiCo and Kroger are operating in the realm of gouging, the meat industry, which has also been accused of leveraging market position to increase prices above inflation rates, says they are simply navigating current supply and demand issues that have prompted them to protect inventories in an uncertain time by keeping prices high.  For some industries, a ban would only exacerbate price issues. 

Any authority given to the Federal Trade Commission would first have to be legislation adopted by Congress which means that this approach to lowering food costs could take quite some time to make an impact. 

What is the Robinson-Patman Act and How Could it Help?

Along with price gouging, there is a growing concern that major corporations are giving better deals to larger stores to the extent that it is eliminating competition from smaller chains.  This price discrimination or, anti-competitive behavior, has prompted a reassessment of a 1936 Act that essentially regulates contracts between grocery retailers and their suppliers.

If the Robinson-Patman Act were to be enforced to its full measure, then there would be a deep dive into how large and small grocery stores purchase their inventory to see if there is a discrepancy between contracts. If it is discovered that suppliers are giving large retailers the better prices effectively edging out the competition from smaller retailers to build the monopoly, then there would be an avenue for rebuilding competitive markets.  Historically, increased competition works to drive prices down for consumers.

This solution leans on existing legislation, in fact, pricing investigations are already underway, which suggests that it could be an effective approach to reducing the average family’s grocery budget.  Skeptics argue that while a federal lawsuit is typically works to shake things up, the process could take years to play out. Effort placed here wouldn’t necessarily mean consumers see a difference at the supermarket any time soon.

Can We Lower Production Costs Enough to Change Prices?

Another proposed option for reducing food prices is to tackle production costs, mainly fuel. Fuel prices tend to take the blame for expensive food which is true to an extent. It seems that just about every article I write mentions the price of fuel as a factor in supply chain dynamics and commodity pricing. If it’s possible to reduce the cost of producing, manufacturing and transporting food then it would seem logical that the cost of purchasing it would also come down.  

While fuel prices will likely come down at some point, it might not be within a president’s control to orchestrate a scenario in a way that impacts the cost of groceries in the next year. Supply and demand factors stretch beyond national boundaries. Over the last thirty years fear that production has reached its peak, economic recessions and then recoveries, pandemics, and lags in supply because of transportation hiccups or political unrest have all played a part in fluctuating prices.

What a president can do is tap into oil reserves, limit exports and open federal land for drilling; all of which could influence domestic fuel prices and in turn affect the cost of living which would eventually trickle down to the price of groceries.

Likely all three of these proposed paths are part of reducing the cost of food in the long run. And we have to remember that prices rarely fall back to what they once were.  Making food affordable is a realistic goal that also factors in how people earn money and how much the average family makes. The question isn't just how can we make food cheaper, it's also how can we make it possible for more people to comfortably afford necessities.