News: Election food price fight escalates

Monday, August 19, 2024

Election food price fight escalates

Aug 19, 2024

Kamala Harris speaks at a rally.

Democratic nominee Kamala Harris said she'd crack down on food prices as president by banning price gouging. | Francis Chung/POLITICO

QUICK FIX

— Kamala Harris is posturing to reel in high grocery store costs by banning price gouging. But economists, industry representatives and Republicans aren’t sold.

— Federal officials are launching a voluntary sodium reduction guidance for food manufacturers, part of FDA’s goal of curbing diet-related illnesses.

— USDA is defending the action it’s taken on the current avian influenza outbreak to lawmakers who want to see ramped-up action.

IT’S MONDAY, AUG. 19. Welcome to Morning Agriculture. I’m your host Grace Yarrow. Happy National Potato Day! Send tips and your favorite potato-based recipes to gyarrow@politico.com and follow us at @Morning_Ag.

During unprecedented times, POLITICO Pro Analysis gives you the insights you need to focus your policy strategy. Live briefings, policy trackers, and and people intelligence secures your seat at the table. Learn more.

Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.

Driving the day

TACKLING FOOD COSTS: Even as food inflation slows, grocery store costs are top of voters’ minds this year — and Democratic nominee Kamala Harris is pitching a price gouging crackdown that’s raising concerns from industry leaders and outrage from Republicans.

In a Friday speech, during which she outlined her economic policy goals, Harris said she would work to pass a federal ban on price gouging as president.

“My plan will include new penalties for opportunistic companies that exploit crises and break the rules, and we will support smaller food businesses that are trying to play by the rules and get ahead,” she said.

Voters have felt the pangs of rising food prices, which have increased more than 20 percent over the last four years, making the issue a key political talking point in the matchup between Harris and former President Donald Trump.

Balancing act: Harris’ proposed takedown of corporate greed goes further than Biden, who hesitated to take any sweeping action on food inflation, and is the latest signal of how Harris’ policies may diverge from the current Biden administration.

Capitol Hill’s role: House Minority Leader Hakeem Jeffries (D-N.Y.) said in a CNN interview Sunday that House Democrats will work with Harris on her economic proposals, arguing “we’ve got to drive down costs, including for groceries.”

But even under a Harris administration, it’s unlikely Democrats will have the votes to pass price-gouging legislation in Congress. Her proposal essentially mirrors a bill from Democratic Sens. Elizabeth Warren (D-Mass.), Bob Casey (D-Pa.) and Tammy Baldwin (D-Wis.) that has stalled amid GOP opposition.

And Harris’ pitch, which includes giving the FTC more resources to investigate major acquisition deals in the food sector, would need GOP buy-in so Democrats can swing extra FTC resources via spending fights in Congress.

Lawmakers have also eyed the executive order route in the absence of movement in the halls of Congress. Warren and other progressives previously pushed President Joe Biden to take sweeping executive action to drive down food prices, while praising his work securing voluntary price reductions from some corporations.

PROMPT PUSHBACK: Former President Donald Trump tore into Harris’ economic proposals during his campaign speeches over the weekend.

“She says she’s going to lower the cost of food and housing starting on Day One,” he said at a Saturday rally in Pennsylvania. “But Day One for Kamala was three-and-a-half years ago.”

Trump noted on Thursday that Harris’ price gouging crackdown would lead to consumers experiencing “food shortages, rationing, hunger, dramatically more inflation.”

“This announcement is an admission that her economic policies have totally failed,” he said.

Trump’s rebuke aligns with the GOP’s messaging over the last several years, arguing Democrats’ own policies have fueled food inflation and that Biden has done himself a disservice by touting a thriving economy when many voters haven’t experienced significant improvement at the grocery store.

Industry rebuke: Food industry representatives have rejected accusations of price gouging, arguing that high input costs have forced grocery store companies to raise prices.

“The proposal calling for a ban on grocery price gouging is a solution in search of a problem,” said Greg Ferrara, president and CEO of the National Grocers Association, in a statement. “Our independent grocers, already operating on extremely thin margins, are hurting from the same inflationary pressure points as their customers.”

Ferrara instead called for the Executive Branch to “look closely at anticompetitive behaviors” and reduce credit card fees and “burdensome” regulations.

FMI, The Food Industry Association, which represents food retailers, pointed out that the Labor Department’s recent inflation report signals that year-over-year inflation is moderating and that grocery stores operate on tight profit margins.

“Americans should feel confident that the food industry has zero tolerance for deceptive practices like price gouging, an illegal activity that has no place in our stores and is inconsistent with the way the food industry conducts its business of feeding American families,” said FMI’s President and CEO Leslie Sarasin.

AROUND THE AGENCIES

VOLUNTARY SODIUM REDUCTIONS: The Food and Drug Administration is prompting food manufacturers to cut sodium levels in packaged and processed products by around 20 percent to help curb health risks from excessive salt intake.

The FDA is aiming to reduce consumers’ average sodium intake to 2,750 milligrams per day — a level still above the recommended limit of 2,300 milligrams per day. But it’s also well below the average American’s salt consumption of 3,400 milligrams per day, which health officials have warned contributes to adverse risks to heart and overall health.

The new guidance will not be enforced by federal officials. But it’s a first step to gradually reducing how much salt manufacturers are putting into packaged foods, and it gives companies time to adapt recipes to account for lower sodium levels.

The history: Salt reduction targets have been met with some skepticism and defiance from industry stakeholders and Capitol Hill lawmakers, who argue that similar efforts under the Obama administration were burdensome for producers. Any efforts to revamp Americans’ diets through salt limits are a vexing talking point for food makers that rely on using sodium for taste, texture and food safety.

PUSHING FORWARD WITH BIRD FLU RESPONSE: USDA is defending its avian influenza response as lawmakers push for the agency to ramp up action.

House Ag members Randy Feenstra (R-Iowa) and Jim Costa (D-Calif.) requested last week that USDA establish a new strategic initiative to research biosecurity measures, vaccines and more efficient methods of culling infected birds.

A USDA spokesperson emphasized that existing steps taken by the department, in coordination with other federal agencies, have properly reaffirmed the safety of the food supply.

The vaccine question: “Vaccines for poultry are an important part of our efforts, and we are pursuing their development while keeping in mind that a vaccination strategy would be challenging to implement domestically and would have significant trade ramifications that would affect poultry farmers, and still may not be guaranteed to eliminate the virus,” the USDA spokesperson said.

A bird flu vaccine for cattle is “promising,” the spokesperson said, but early in the development process. In the meantime, health experts are relying on encouraging producers to take voluntary biosecurity measures.

What’s next: Like in previous years, federal officials are expecting a bird flu upsurge in the fall as wild birds begin their migrations. But they told reporters last week that they were not expecting increased risk among dairy cattle.

The current outbreak of HPAI has led to the deaths of more than 100 million domestic and commercial birds and sickened dozens of dairy herds since 2022.

The new USDA comments on vaccine efforts come as officials have been reassuring producers and consumers that the federal response is adequate, pointing to its increased intrastate testing and financial support for producers.

DON’T MISS OUR AI & TECH SUMMIT: Join POLITICO’s AI & Tech Summit for exclusive interviews and conversations with senior tech leaders, lawmakers, officials and stakeholders about where the rising energy around global competition — and the sense of potential around AI and restoring American tech knowhow — is driving tech policy and investment. REGISTER HERE.

Row Crops

— The bird flu outbreak is changing how dairy farmers approach traditions at state and county fairs this year. (The Washington Post)

— USDA’s Packers and Stockyard Division, responsible for enforcing the 1921 competition law that regulates meatpacking, is investigating Tyson Foods. (Investigate Midwest)

THAT’S ALL FOR MA! Drop us a line and send us your agriculture job announcements or events: gyarrow@politico.com, meredithlee@politico.com, marciabrown@politico.com, abehsudi@politico.com and ecadei@politico.com.