Monday, April 21, 2008

Food Rationing in America

That is the headline in the New York Sun Food Rationing Confronts Breadbasket of the World. Sounds omnious right? Well, take a look at the lead:
Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing.

Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.

At a Costco Warehouse in Mountain View, Calif., yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy.
"Retailers are limiting purchases" is far different from rationing. Rationing is, by definition, a governmental limitation on the the amount of food that a person can have. We had gas rationing in the 1970's and rationing during World War II. The issue was not so much a matter of a dearth of supplies but that people would hoard things because they can buy something that is non-perishable, or relatively non-perishable at a lower price.

Retailers know that the price of these staples, like flour, rice, etc are going to go up, either in response to demand or more likley because wholesale costs are going up as a result of increased energy, fuel and other fixed costs that underlie the price of such goods.

Retailers often limit the amount a person can buy on certain items. For instance, when there is a sale on say Coca-Cola 2-liter bottles for $.99 a bottle, there is often a limit of five or ten. A retailer imposed limit on a product is not rationing.

However, are we looking at food shortages or price spikes or a combination of both.

1 comment:

Lily said...

With the price of food going up and up I'm glad that I don't have to pay full price for my prescriptions any more. I found a prescription discount card at There's a membership fee but it's only $4.95 a month for the whole family! And they put the drug prices on the website to check before you enroll.