Agriculture Secretary Tom Vilsack on food inflation

Welcome back everybody. We learned in this week’s CPI report that grocery prices were unchanged in March compared to the February year over year. The so-called food at home category was up by just one point, 2%. But prices for dining out jumped by 4.2% year over year. Joining us right now to talk food inflation and much more is the Agriculture Secretary, Tom Vilsack. And Secretary, thanks for being here today. It’s good to be with you. Let’s talk first about inflation because that’s the issue that the people are watching so closely. Definitely when you’re looking at the month over month numbers, inflation is down for food at grocery stores at least. But we are looking at higher commodities prices and it has a lot of people concerned about what’s in the pipeline. Where do you think we stand, right? Well, in terms of commodity price, actually commodity prices have come down quite a bit. And the result of that is I think farmers are a little stressed. You have to remember that farmers only get about 15 to $0.20 of every food dollars. So commodity prices have less of an impact than perhaps supply chain disruptions, which is why I think the president’s been so focused on making sure that we strengthen the supply chain. Also looking at ways in which people can better cope with whatever the inflation rate might be. That’s why he’s focused on things like junk fees, tax relief with child care, child care, tax credit, things of that nature making a little bit easier for families. He often talks about the bottom up in the middle out, and that’s basically what we’re trying to do there. There’s a story on the front page of the Wall Street Journal. Just when you mention what you guys can do to fight inflation, the Journal points out that you’ve got very few tools you can do to fix inflation. Well, I, you know, I think one of the things we’re doing is trying to create more competition, certainly in the processing side that certainly impacts and effects food prices. I think we’re trying to improve the transportation system. If you can get goods from here to there more efficiently and more effectively, that’s going to make a big difference. And again, I think there are ways in which the administration is trying to figure out ways to help the pocketbooks of American families. The these junk fees is a big issue. You know, I was at a meeting the other day where people were talking about the Ticketmaster and the cost of the service to get tickets to the NCAA women’s basketball tournament. The service charge was almost as much as the ticket. So I think that there are ways in which we are making a difference. Obviously, wages are up as well. We’ve got an economy that I think is the envy of the world at this point in time. We obviously want to continue to do that. When you talk about strengthening the supply chain, how do you go about doing that? When it comes to food, basically 2 two things. One, creating a more local and regional food system so that we’re not as reliant on just a handful of processing facilities. For example, we’ve invested over a billion dollars in nearly 400 projects across the United States to expand access to processing capacity. Again, strengthening the transportation system as we invest in roads, bridges, rail systems, ports and so forth, that’s going to allow us to get product to market more quickly and more efficiently. So it’s a combination of a number of things, none of which are easy and none of which take, yeah, it could be done quickly, right? They take time. And in the meantime, the investments from the IRA could very well push inflation higher because it’s money that’s pouring into the economy to create jobs for some of these things along the way. But that does create some inflationary pressures. You know, one of the things that I think is missed about the IRA is the fact that it’s paced. It’s not as if all this money is all of a sudden showing up in the economy. It takes time to get a contract for a road construction. It takes time to fix the rails system. It takes time to improve ports. So this resource is going to be stretched out over a period of time. The money that we have at USDA from the IRA and the infrastructure law are stretched over a period of years. So I think you’re going to see more of a measured impact and investment in the economy overall. What we’re going to see is a much stronger and much more competitive American economy.