Chief Pricing Officer

So, we talk a lot here about food prices and what they mean to manufacturers and the folks at the start of the supply chain. But what about the folks at the other end, like you and me? As most people know first hand, food prices can be one of the biggest drains on families’ budgets – the bigger the family, the bigger the drain, and the lower a family’s income, the bigger bite food takes out of the monthly budget.

The United Nations’ Food and Agriculture Organization estimated that international food prices are up more than 60 percent since 2006, including a staggering climb during the first three months of 2008. Beyond the obvious bad news, other economic dangers stem from high food prices – a reverse “trickle-down” effect. Food and housing are a family’s two basic costs, expenses that cannot be forgone or significantly trimmed back – everyone needs to eat and needs a roof over their head. As those costs increase, consumers stop discretionary spending: restaurant visits slow down, people stop buying big ticket items, and generally stop spending money. Those at the bottom of the economic ladder also need more support, providing further strain.

Food prices are all encompassing, affecting broad swaths of the public and creating depressed conditions at the very base of the economy – consumers. Combine this with extreme pressure from the financial markets, and the country’s economy is squeezed from almost every angle.

This is a very simple illustration of why food producers need to intelligently determine prices. Smart prices throughout the supply chain benefit everyone in the long run.