Editor’s Note: At SpokenFood, we draw the line at the farm gate. Farmers aren’t the villains in this story—they’re the first victims and the first link shattered in a broken food chain. You – you’re the last child at the end of the bench with an empty bowl, waiting for your gruel. Prices are initially set by the markets. The real greed comes from further down the trough, when the manufacturers and distributors start wetting their beaks.
As mentioned at the top of the story, the price-gouging in the American food supply chain exists because those distributors and other bad actors are taking huge profits, far over-and-above the normal constraints like fuel prices, wages and cost-of-living inflation.
Let’s break it down.
1. The Starting Point: The Farmer
- Prices are determined by market exchanges, not individual discretion.
- They cannot arbitrarily raise prices — if the market says corn is $4.75/bushel, that’s what they get, even if their diesel, fertilizer, or equipment costs have doubled.
- Many are selling at or below cost, surviving on subsidies or crop insurance.
Verdict: Farmers have always been squeezed. They are not the gougers. (And remember, your greedy and scurrilous CEOs don’t have to contend with rain and wind and heat and drought and the other fickle vagaries of Mother Nature.)
2. The Next Link: Food Manufacturers
This is where pricing power starts consolidating.
- Companies like Tyson, Smithfield, Cargill, General Mills, Kellogg’s, and PepsiCo take raw farm commodities and turn them into finished products.
- They control the processing, packaging, and branding layers — where the markup begins.
- They often blame “input costs” (fuel, labor, supply chain) for higher prices, yet their profit margins have ballooned post-COVID.
- Public earnings calls and annual reports show record gross margins even as they cite inflationary pressure — that’s the loose thread and the driving force behind the WalletGate mission.
Verdict: This is the first real layer of price manipulation.
3. The Distributors
Here’s where price-gouging truly hits its stride and becomes systemic:
- Distributors like Sysco, US Foods, PFG, and UNFI then buy from those manufacturers and add another thick layer of markup before they ship the goods to restaurants, grocery stores, or institutional kitchens.
- They often blame fuel costs or logistics constraints, but our data from the BLS and the EIA already shows those excuses don’t hold a bushel of beans — diesel prices dropped while food-at-home prices continued to soar.
- Their own SEC filings and annual reports show double-digit revenue growth far outpacing cost inflation.
Verdict: This is the “profit capture” phase — where the gouging has been quantified with our ‘Mona Lisa Chart’*.
4. The Consumer Fallout
By the time the item hits the shelf, each step — manufacturer → distributor → retailer — has added its own percentage, compounded by whatever corporate rationalizations, into an unjustifiable end price. The excuses no longer hold water.
- Consumers see a can of green beans go from .79 cents a can to $1.29 in short order and bacon from $4.99 to $8.99, while the farmer still earns pennies on the pound, if at all, from cold-logic commodity brokers and unsympathetic market-makers and yet they continuing feeding us on the daily. Think about that.
- Prices on the shelf now spike by the month, certainly week-to-week in some cases.
- Consumers have shared this information with SpokenFood on a regular basis and it’s clear the distributors are raising prices at will.
Verdict: We’re leaving the farmers out of the target line. SpokenFood LOVES farmers.
We resume our continuing coverage this week with C&S, Spartan Nash, et al. – Harper Nash, Senior Writer
*Here’s the Mona Lisa Chart, once again. It still boggles the imagination.
Sources/Images: Farm Policy Facts, Emerging Ag Inc., Geopolitical Monitor, Wikipedia, Bureau of Labor Statistics, Environmental Protection Agency.