“Congress and the Bush Administration must act now in order to stave off further increases in consumer food prices,” said ABA Chairman Kenneth “Chip” Klosterman, President, Klosterman Baking Company. “Consumers are at their breaking point – ABA strongly urges members of Congress to take action before they return home for the August break to alleviate the increasing food cost burden upon the American consumer.”
Recently released Consumer Price Index data shows that the index for food at home increased by 1 percent in the month of June, increasing at an annual rate of 8.7 percent, well above the 2007 inflation rate of 5.6 percent. Historical yearly inflation of food at home is 2.5 percent. Baked goods increased by over 2 percent during May and June, increasing at an annual rate of 15.5 percent.
“Food inflation, including inflation of baked goods prices, is much higher than historical averages,” said ABA President and CEO Robb MacKie. “Congress and the Administration should take immediate action by implementing ABA's Action Plan, which includes returning non-environmentally sensitive Conservation Reserve Program acreage to production and repealing detrimental food for fuel ethanol mandates.”
ABA has urged Congress and Administration officials since early 2007 to take action to prevent a food and commodity price crisis. In June 2007, ABA submitted a formal request to then Agriculture Secretary Mike Johanns to immediately release without penalty to farmers up to 10 million acres from the CRP. ABA has repeatedly met with Secretary Ed Schafer, White House and Congressional leaders urging commonsense steps to ease the burden on bakers and consumers. These efforts included the March 12 Band of Bakers & Allied Forces March on Washington and the follow-up Band of Bakers II last month, during the ABA Policy Conference.
“The CRP currently idles millions of acres of productive farm land. The ethanol program takes even more acreage away from food crops,” said Mr. MacKie. “If CRP land would have been released last summer, farmers would have been able to plant additional wheat in the fall, possibly avoiding the runaway spike in wheat prices in early 2008, which are contributing to today’s record consumer prices for baked products. Congress missed the opportunity to pro-actively address this issue during the farm bill. Consumers cannot afford further Congressional and Administrative inaction.”