Speak Out or Shut Up
March 1, 2008
Speak Out or Shut Up
Dan Malovany, editor
I don’t have any problem with making a stink if something rotten is going on around me. I don’t mind ranting about a situation, especially if it calls attention to a bad one. Heck, even good old-fashioned primal scream therapy works for me.
So it should come as no surprise that I don’t take issue whatsoever with the American Bakers Association rounding up the troops and getting a “band of bakers” to meet with newly confirmed Agriculture Sec’y. Ed Schafer, senior White House officials and selected congressional representatives to call attention and demand relief from historically high flour prices and critically low wheat reserves.
Robb MacKie, ABA president and CEO, is right when he says “extraordinary times call for extraordinary measures” and bakers should speak with “a loud and united voice” about the high price of flour and, in some cases, the availability of it in the market. In the weeks before the March 12 meeting, ABA reached out to other baking groups to attempt to build a broad coalition that includes bread bakers, cookie and cracker producers, independent bakers and other producers of grain-based foods to march on Washington.
That sounds downright civil.
The trouble with the wheat market isn’t a new one. Actually, the price of wheat and other commodities has been going up for more than two years, prompting ABA to form a commodity task force to monitor the deteriorating situation. As MacKie notes, it simply went from bad to worse when the supply of reserves tumbled during the past 12 months.
Sticking your heads in the ground isn’t going to make it go away. In fact, the pain has gotten excruciating since the price of flour bubbled up over the last few months, just like Internet stocks did during the late 1990s. Sure, the law of supply and demand will even out in the long run ... at least, you hope so. But right now, the law isn’t on the bakers’ side.
“I haven’t talked to a single individual who thinks this situation is going to change overnight,” MacKie says. “Are there speculators who have bought in and locked down? Yes. Are we exporting too much wheat? Probably yes. Are we in a totally new global grain market? Absolutely.”
ABA staffers and baker members debated long and hard whether to pull the trigger on the event. In the end, the decision was made that something had to be done to send a strong signal to government officials that wheat supply is in dire straits.
In general, ABA’s requests are quite reasonable. First, they want the United States Department of Agriculture to release 5-6 million non-environmentally sensitive acres of wheat out of the Conservation Reserve Program. Second, bakers want to urge the USDA to become more cautious and curtail wheat exports until they can ensure there are enough reserves, just like other countries are doing. Third, they want to call attention to the ethanol movement and how foolish it is to trade food for fuel. Besides being economically unsound, using corn to make ethanol is simply a failed policy that feeds gas-guzzling cars instead of people.
MacKie is well aware that calling for some government action is typically uncharacteristic of ABA, which, for the most part, promotes free trade and minimal government intervention in business. But, as he says, these are extraordinary times. Something has to be done.
Perhaps the biggest gain from this effort will be one of perception and awareness. Not only are elected officials being informed about the problem, but so are consumers, retailers and others who buy or sell baked goods. Finding a remedy is as much a public relations issue as it is a policymaking one. Everyone needs to be prepared to pay more in the long run, not only for grain-based foods, but for almost all types of food.
Yeah, I don’t have a problem with anyone going kickin’ and screamin’ to Washington and back. Make them know that the current status quo blows. Tell them you’re mad as hell, and you’re not going to take it anymore.
Then let them know loud and clear that you’re doing something about the problem, and raise your prices. You’ll feel a lot better in the morning.