U.S. Agriculture Secretary Tom Vilsack said some recent price increases were the result of businesses “taking advantage” of the coronavirus pandemic and supply chain disruptions to push up food costs.
Food prices have soared globally in the past year as economies recover from the pandemic and amid a jump in energy and fertilizer costs. Transporters are also struggling to cope with the extra demand for goods, leading to huge delays at ports.
“The question is whether all those increases are directly correlated to those causes or whether people are taking advantage,” he said, referring to the fertilizer and seed industries. “There are some comments I’ve read — attributed to some folks in the agribusiness world — where they’re suggesting or at least intimating that this is an opportunity to raise prices beyond what is necessary to deal with supply-chain challenges they may face.”
The rise in food costs has contributed to U.S. inflation accelerating to 7.5%, putting pressure on President Joe Biden ahead of November’s midterm elections.
Food prices should start to fall as the U.S. economy normalizes and supply problems are resolved, Vilsack said.
“If they come down, will they come down commensurate with how much they went up?” he said. “If they don’t, that would suggest there’s something more afoot here. People should be asking those questions.”
The government will allow imports of Mexican avocados to restart on Monday, ending a weeklong suspension triggered by a threat against a U.S. Department of Agriculture food inspector. Wholesale prices in Chicago surged 59% during the ban, according to USDA data compiled by Bloomberg.
“I would raise some serious questions about that cost increase given the fact it was obvious this was a short-term situation,” Vilsack said when asked about the 59% figure. “There’s no justification for that. None.”
He rejected a call from Republicans for “damages” from China to address shortfalls in purchases of U.S. exports. House Minority Leader Kevin McCarthy and a group of colleagues said last week that Beijing failed to meet a commitment as part of the first phase of a U.S.-China trade deal to buy $16 billion of agricultural goods in 2020 and 2021.
“That’s interesting coming from the party that basically caused the problem to begin with,” said Vilsack. “That’s not an answer. The answer is negotiations. The answer is looking for ways in which we can strengthen the trading relationship in agriculture with the Chinese. I’m confident we’ll see a better performance.”
Vilsack traveled to Dubai to promote U.S. agricultural trade with the United Arab Emirates and neighbors in the Persian Gulf. The U.S. will look to boost sales of products including nuts, beef, fruits and vegetables, he said.
The UAE is “a gateway to the Gulf countries,” he said. “It’s an opportunity for us to expand efforts in Saudi Arabia, Kuwait, Qatar, you name it. We offer such an incredible array of products. We can basically meet any need that folks identify.”