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Food Inflation is Here!

Next time someone tells you that only the left side of the aisle cares about feeding hungry Americans, remind them that it's green special interests and Michelle Obama's size-awareness campaign that's making it harder for Americans to feed their families. Food inflation is here, folks. Food costs the same; there's just less of it. The New York Times ran an article this week complaining that consumers are up in arms because shrinking grocery packaging means they can't feed their families. It's a terrible thing that goods cost money; no question about it. Yet if food manufacturers tried to fix the problem from the consumers' side of the problem, we'd have a bail-out situation. Manufacturers would be losing money on under-priced, over-sized food packages. It would only be a matter of time before grocery suppliers go out of business. Here's my explanation:

Try as the government might to subsidize against market fluctuations, the market always prevails. "Food inflation" is as real as monetary inflation, and the great American recession has hit food producers as hard as it's hit the rest of us.

It's called "chiseling," and this time it doesn't refer to your washboard abs -- at least not directly. Chiseling is the practice of selling marginally smaller packages for about the same price.

If market demand doesn't cover increased production costs for that same 6-ounce can of tuna, the manufacturer has to sell a 5-oz can. Chiseling is smart business. The alternative is to keep failing to cover costs for those same 6 ounces, and eventually go out of business.

Chiseling isn't just smart business; the policy aligns perfectly with government priorities. First Lady Michelle Obama wants a national size-awareness campaign? Great; smaller packages mean fewer calories. Green initiatives pushing for less packaging? Fantastic; smaller boxes use less cardboard.

Subsidies are the way the government picks winners and losers. By throwing a ton of money behind certain industries, the government forces the cost of all food production to rise. Grocery shoppers who just want to feed their families have to compete with the government's agenda to afford the price of food. It's not just the cost of production that's rising. When FLOTUS pushes hard for a "get-fit" agenda and green special interests demand smaller package sizes, the market is ripe for food producers to shave a little off whatever they're willing to trade to consumers for their dollars. Food inflation is not the worst thing for America. Programs like green initiatives and Michelle Obama's size-awareness campaign would have no traction if Americans weren't game for a little shrinkage in the grocery department. Portion control might be good for us, but the decision to cut back on food should come from the individual. It should not come from subsidies and favors prioritizing special interests groups whose agenda certainly does not include you.