While campaigning in Michigan Wednesday, GOP vice presidential candidate JD Vance talked up a couple of ways to lower food prices – firing the agriculture secretary and increasing oil and natural gas production.
The topic came up when a reporter asked the Ohio senator what should be done about energy costs to help lower the price of groceries. A member of the crowd then shouted, “Fire Granholm,” a reference to Energy Secretary Jennifer Granholm, a former governor of Michigan.
“The first is we’re going to fire the agriculture secretary. … She’s not doing a very good job,” said Vance, possibly mixing up Granholm with Agriculture Secretary Tom Vilsack.
Vance went on to argue that lowering oil and natural gas prices could reduce fuel and fertilizer costs for farmers, savings he suggested would be passed on to supermarket shoppers.
“If we ‘drill, baby drill,’ and take advantage of the incredible bounty of this nation, we’re going to lower food prices in a very big way for American consumers. That’s just a fact,” he said.
The average farm share of every dollar consumers spend on food is just under 15 cents, according to USDA's Economic Research Service. The exact share varies according to the type of food and the amount of processing, shipping and packaging it requires.
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ERS estimates farmers will spend $15.1 billion on fuel this year. Adjusted for inflation that is less than they spent in any year of the Trump administration except for 2020.
On the other hand, fertilizer costs remain elevated. Farmers are expected to spend $31.7 billion on fertilizer this year, up from $31.1 billion last year but down from $33.5 billion in 2021 and $39 billion in 2022, when adjusted for inflation. Previous to that, fertilizer costs had not exceeded $30 billion in 2024 dollars since they reached $32.8 billion in 2015.
Food prices rose sharply from 2021 into 2023, but inflation is now running below the historical average. According to the latest Consumer Price Index, released Wednesday, the cost of eating at home rose by 0.1% in July and is up 1.1% from July 2023.
ERS is forecasting that grocery prices will be up 1% in 2024 over 2023 and rise 0.7% in 2025. The 20-year average inflation rate for food eaten at home is 2.7%.
