Two of the largest supermarkets in America are merging

[BumRushDaShow]

Last edited Fri Oct 14, 2022, 11:41 AM - Edit history (3)

Source: CNN Business

New York CNN Business -- Kroger announced Friday that it plans to buy Albertsons in a nearly $25 billion deal that could change the US retail industry and impact how millions of customers buy their groceries. The deal, which is expected to close in 2024, would combine two of the largest supermarket chains in the country and create one of its largest private employers. The two companies have a combined 710,000 workers - most of them unionized in an industry with low union rates - nearly 5,000 stores and more than $200 billion in sales.

The retail industry has consolidated in recent years, and merging would give the companies greater scale to fend off competition from Amazon (AMZN), Walmart (WMT) and other retail giants. The merger "accelerates our position as a more compelling alternative to larger and non-union competitors," Kroger CEO Rodney McMullen said in a statement Friday. The move also comes as companies battle higher costs and food inflation reaches its highest level in decades. Prices at grocery stores continued to soar last month. The food at home index, a proxy for grocery store prices, increased 0.7% in September from the month prior and 13% over the last year.

"The combined company could be more productive and profitable than either of them individually," Joseph Feldman, a retail analyst at Telsey Advisory Group, said in a note to clients Friday. Expanding into new geographies, growing new businesses, and combining technology and supply chains could fuel growth, he said. Kroger (KR) will buy Albertsons for $34.10 a share -- a roughly 30% premium above the grocery chain's average share price over the course of the past month. Shares of Kroger (KR) slid 2% in pre-market trading, while Albertsons soared more than 11%.

The companies said they will spin off nearly 400 stores to form the new rival in an effort to gain antitrust clearance. But analysts say it will be a significant hurdle to pass antitrust muster. "A deal of this size that has a direct impact on consumers would face significant scrutiny from regulators and take a long time period to be approved," Feldman said. Consumer watchdogs, unions, and Democrats have already come out strongly against the deal.

Read more: https://www.cnn.com/2022/10/14/business/kroger-albertsons-merger/index.html

---

Soon it will just be called "The Supermarket".

Article updated.

Previous headline -

Supermarket mega-merger: Kroger will buy Albertsons

Original article and headline -

Kroger announces deal to merge with Albertsons to form a mega grocery chain

New York CNN Business -- Kroger announced it's merging with Albertsons in a $24.6 billion deal, creating one of the largest grocery store chains in the United States with nearly 5,000 stores when combined. "The combination creates a premier seamless ecosystem across 48 states and the District of Columbia, providing customers with a best-in-class shopping experience across both stores and digital channels," Kroger said in a press release.

The merged company will give it greater scale to compete against Amazon, Costco, Walmart and smaller grocery store rivals. Traditional grocery store chains are losing market share to lower-priced companies, such as Aldi, Trader Joe's, Grocery Outlet because of stubbornly high inflation and rising costs. Prices at grocery stores continued to soar last month, adding even more pressure to shoppers' wallets.

The food at home index, a proxy for grocery store prices, increased 0.7% in September from the month prior and a stunning 13% over the last year, according to new government data released Thursday. Kroger (KR) said it would buy Albertsons for $34.10 a share -- a roughly 30% premium above the grocery chain's average share price over the course of the past month. Shares of Kroger (KR) slid 2% in premarket trading, while Albertsons soared more than 11%.

First approved by both of the company's board of directors, the merger still needs regulatory approval. To help ease that process, the company will not include upwards of 375 stores in the deal, and it will spin them off into a new company to "create a new, agile competitor," the chains said in a statement.

This paragraph makes zero sense (from earlier article version) -

Traditional grocery store chains are losing market share to lower-priced companies, such as Aldi, Trader Joe's, Grocery Outlet because of stubbornly high inflation and rising costs.

The stores they cite are "small" and thus are not ordering in the volumes that the larger chains are able to do where there is the potential for.... .... VOLUME DISCOUNTS (so using the buzzwords' excuse of "stubbornly high inflation" as a reason that they are losing marketshare to a smaller company that doesn't have the same level of discounts, and dismissing that "inflation and rising costs" SHOULD negatively impact those smaller chains even more, just underscores the bullshit).

----------
Just to add to this thread - here in the Philly area, we also have (independent of Albertsons acquisitions) "ShopRite" and "Giant Foods", a sortof regional chain that has expanded as Pathmark and A&P (A&P being the original BIG chain supermarket progenitor) disappeared, both folded into Albertsons. Also used to have Penn Fruit back in the day (eventually becoming "Shop N Bag" with a few left).

[underpants]

1. Yikes.

[BumRushDaShow]

2. I know

because IIRC, Albertson's owns my Acme chain (or as Philadelphians are wont to say - "Ack-uh-me" ).

[we can do it]

6. Haha one of my Akron Ohio friends says it that way😂

[BumRushDaShow]

12. Seems the Jersey folks do it more

I just call it the "Ack-mee".

(although the one closest to me was a Pathmark before it became an Acme, and was a Super Fresh before it was a Pathmark, and was Pantry Pride way back in the day before it became a Super Fresh )

[Tree-Hugger]

21. I don't remember Pantry Pride

I say "Ack-Mee." My family and most of the people I grew up with pronounced it the same. My understanding was that "Ack-a-mee" was more of a South Philly thing?

I'm in the suburbs now, where Acme has closed most locations. The only ones I know of are home in Philly and also in Jersey. It was never one of my favorite stores, though my mom shopped there for many, many years.

Was Pantry Pride a chain? In my neighborhood, we had A&P. That eventually became O&O. It's now gone and replaced by Rite Aid.

[BumRushDaShow]

55. Apparently the original name for Pantry Pride was "Food Fair" (chain)

I sortof barely remember that "Food Fair" name used around here but saw "Pantry Pride" more -



The other as I was growing up was "Penn Fruit". In fact I just found this pic - as a kid my mom would pile us in the stationwagon and go to this Woolworth's... and then we would stop by that Penn Fruit shown in background near the bottom right-hand corner!



They used to have gumball machines when you first walked into I think, a little foyer area.

[Prof. Toru Tanaka]

59. Baltimore had a lot of Pantry Prides along with A & P's back in the 1970s.

I too, remember "Food Fair" from a young age, but just barely.

If there are any Krogers in Maryland, they would be in Allegheny or Garrett county to the far west.

I liked A & P back in the day; I am sorry they are long gone.

[Polybius]

49. Acme is still around?

We had them in Staten Island up until the 80's. Haven't seen one since.

[BumRushDaShow]

54. Down here after your (NY's) Pathmark had come (in the '70s) and eventually went bye bye

Acme took over a bunch of those stores (some where Pathmark had taken over a different chain at that location). So right now, I am within 4 miles of 4 Acmes.

But I grew up with Acme here since the early '60s (used to live a couple blocks from one and as kids we would "walk up to the Acme" to pick up stuff). That and A&P were the most prominent until the late '70s/early '80s when things started changing.

[melm00se]

64. Just watch

a Road Runner/Wiley Coyote cartoon and you will see Acme.

[bucolic_frolic]

3. I doubt Kroger is done with tinkering

They have to compete with Walmart. 90% of the US population lives within 10 miles of a Walmart.

I can't help noticing that Shop-Rite, the regional Mid-Atlantic behemoth, has retooled its image and stores and brands. And the CEO is the son of one of the original founders if I recall. They didn't create Bowl and Basket for nothing. Yet they remain a co-op, and are privately held.

Kroger lost hundreds of millions on Lucky's in FL a few years back, I read. It was a health food super, I guess to compete with SuperFresh. I don't think they owned Lucky's but supplied it, so maybe the writeoff was inventory.

Elaine Chao sits on Kroger's BOD.

We are being driven into big time corporate food masquerading as mom and pop brands.

[SalamanderSleeps]

22. Kroger is the largest private kitchen in the world.

Kroger's current pricing strategy is to gouge consumers on the retail end while providing discounts to fast food outlets.

Gouging is generally accepted during election years because policy makers do not want upset the "apple cart."

God forbid they watch the tit walk away

Thank you Ronald "Dutch" Reagan, "Justus" Robert's, and "fuck along get along GOP'ers" for the price of eggs at your local grocer.


It's all about product margin and nothing about people.


The idea of Elaine Chao kissing Mitch's little tiny dick just does not seem plausible.


Maybe they have some kind of secret "spiritual" connection?"


Sorry, if I've made anybody throw up in their mouth a little bit.

[bucolic_frolic]

4. Grocery Outlet? Been around since the 1940s.

It's just now expanding beyond California. Must be a reason.

Aldi's is not small. The Aldi Bros are billionaires. One owns north America, one owns Europe.

"Go into food, young man."

[ificandream]

81. Grocery Outlet specializes in closeouts and they have lower prices than places like Safeway.

Admittedly, we shop there a lot. You have to watch the expiration dates and the quality a little more than Safeway, but we find a lot of good stuff there because of the bargains.

And I wouldn't call Trader Joe's a bargain market. At least they're not that way here in California.

[Bengus81]

5. Total BS if approved. They have the highest food prices where I live

They operate as Dillions in Wichita. We just got done a few years back with a MEGA merger when the Kansas Corporation Commission let Westar energy become a part of KCPL becoming Evergy. Oh sure....there were going to be lower bills because of "efficiency" and all the customers in the base. BULL SHIT!

We got hit with the highest utility bills I've ever had from them this summer after they conveniently raised rates by three cents per KWh in March.

[catsudon]

15. in virginia

the store with the highest price is publix

other than kroger, we also have food lion (we called it lion food here as a joke), walmart, aldi, lidl

[madville]

70. Publix is one of the "high end" stores here in FL

But after being in California a couple of years and shopping at Safeway it was eye opening, CA prices were easily 30-40% higher than FL at comparable stores!

[FoxNewsSucks]

24. I thought customer service at Dillon sucked

when I lived in Wichita. They only lowered prices when forced to, for the first few months after the opening of a super walmart, and then only in the store closest to that walmart. After a few months, back to sky high pricing and lousy service.

Every Kroger-owned chain is the same story.

Wichita is actually a good example of why monopolies are bad. When I moved there in 1984 Dillon was still a regional-owned chain. Albertsons was just building a handful of big stores there. We had Safeway/Food Barns, which were union stores and unfortunately the first to close and be sold. We had Food-4-Less which was a local chain not affiliated with the California F4L. And there were a multitude of local "mom-pop" stores all over town, some so small they only had 4 aisles.

Gradually, one by one, those small stores closed and the big stores consolidated. We noticed that we could be in a small town 200 miles out in the country and the grocery store there had lower prices than Dillon back home. And it only got worse.

Now there's nothing but Dillon, Walmart, Aldi and a couple super-Targets. Every local store in town is long gone. Prices are high, most stores' selection declined and customer service is worse than ever.

But Kroger and Walmart have record profit, so that's all that matters.

[AllyCat]

7. Volume discount? Our local K-Roger owned store has the highest prices in town

They were high when they were the only grocery. Then they got 2 competitors in the same month about 3 years ago. Their prices remain TERRIBLE. We go to Aldi or drive to the big city to go to the grocery co-op or TJ's

[BumRushDaShow]

13. How you can tell

is how much the CEO and top managers make vs the employees. Those "discounts" are not for the customers!

[AllyCat]

35. Their discounts are not worth the purchase tracking.

[BumRushDaShow]

40. The volume wholesale discounts

aren't passed on to the customer but are being hoarded by the top brass (and in some cases, passed on to investors as "dividends" ).

The business media publishes their "expectations" and the chain responds by making sure to "meet or exceed" the "expected profits" (by overcharging customers and blaming "employee costs" for those higher prices).

[Thunderbeast]

8. Albertson's owns Safeway as well.

Soon, Kroger will own four food chains in Portland:

Fred Meyer
Safeway
Albertsons
QFC

[Celerity]

79. Top 25 US supermarket operators by sales

https://www.supermarketnews.com/retail-financial/top-25-supermarket-operators-sales

[Fritz Walter]

9. What kind of politics does Kroger's support?

I see, above, where Elaine Chao is on their board. But what kinds of contributions are they making, especially during a mid-term election season?

Here's why I ask: In northeast Florida, Pube-licks is one of the largest grocery chains. Last year, they announced a six-figure donation to Goobernor Ron DeathSentence's PAC, and the state "rewarded" them with a statewide Covid vaccination contract. Ever since I found out about those dealings, I have boycotted that chain, preferring smaller, and presumably less political stores.

Kroger has started food delivery here, and I'm waiting to see them open brick-and-mortar stores where I can actually pick and choose fresh produce and other perishables. Since Pube-licks has already opened stores in the heart of Kroger's territory, what goes around,...

[Hekate]

10. What could possibly go wrong with this idea?

[Pobeka]

11. How the world does this get approved in the USA?

Kroger owns every grocery store in sight where I live. There is no free market, just a monopoly. Food brands I have purchased for years and prefer have disappeared from the shelves to be replaced by lower quality kroger brands, at the same or higher prices.

This is the same old racket, the business claims they need to purchase in higher volumes to keep costs down for the consumers, so they need a monopoly.

History shows this never happens when there is a monopoly.

[elleng]

45. U.S. antitrust enforcement has been 'nil' in recent years,

and we the people suffer.

[llmart]

61. +1

Same here in Michigan. Outside of the small, independent food stores, we have only Meijer and Kroger in our area. When I was a young woman there were four or five big food stores in my area. It's definitely becoming a monopoly. This mantra in our country of "bigger is better" is about as false as the "too big to fail" mantra that was proven wrong.

[luvs2sing]

14. Bad news for Albertson's customers.

Kroger is a pit.

[dalton99a]

16. List of stores

Kroger:

Baker’s
City Market
Dillons
Food 4 Less
Foods Co
Fred Meyer
Fry’s
Gerbes
Jay C Food Store
King Soopers
Kroger
Mariano’s
Metro Market
Pay-Less Super Markets
Pick’n Save
QFC
Ralphs
Ruler
Smith’s Food and Drug

Albertsons:

Acme Markets
Albertsons
Albertsons Market
Amigos
Andronico's
Balducci's
Carrs
Haggen
Jewel-Osco
Kings Food Markets
Lucky
Market Street
Pak 'n Save
Pavilions
Randalls
Safeway
Shaw's
Star Market
Tom Thumb
United Supermarkets
Vons

[CrispyQ]

17. King Soopers, owned by Kroger, recently implemented a charge for grocery bags.

I think it's 10¢ a bag.

Another company owned by Kroger, VitaCost, where I buy lots of health & beauty products, no longer includes a packing list with your order. You have to remember what you ordered or logon to the computer to verify you received everything you paid for.

[BumRushDaShow]

19. Here in Philly with the plastic bag ban a year ago

the Acme eventually put in place a 10¢ per bag fee as they want you to bring your own (or buy their $1 re-usable ones). And IIRC, the entire state of NJ has a similar bag ban.

After living my entire life of getting bags at the store (first paper, then plastic, then back to paper, then plastic, now paper/plastic as a cost per bag) it has been a forced habit to remember to bring my shopping bags with me to the store... But I've gotten better (have to remember to hang them on the door handle so I grab them on the way out).

[h2ebits]

57. The City of Denver implemented a 10-cent charge for plastic bags throughout the city

So, if you are shopping in Denver then you will get hit with the bag charge. Elsewhere in the surrounding areas, King Soopers doesn't charge for bags.

[Gidney N Cloyd]

18. Albertson's owns Jewel here in Chicago and they're a ripoff. They're gouging on top of inflation.

They haven't even tried to be competitive since the other big area chain, Dominick's, went out of business. There are plenty of smaller chains here that manage to keep prices more reasonable. I don't know if this merger will make things worse but it sure doesn't sound like great consumer news.

[hlthe2b]

20. This means Safeway, King Soopers, Albertsons, Krogers will all be the same and likely end in

a consolidation of stores. Not a good deal for many of us. Plus, while I lament Safeway's often higher prices, the clean, bright, uncluttered, and well-stocked nature of their stores often stands in contrast to King Soopers/Krogers with their partially obstructed aisles made all the worse from daytime stockers due to the lack of overnight employees, and of course the gargantuan plastic behemoth "kiddy" carts with their distracted or angry parents knocking over everything, including other shoppers.

I wish I could think this to be a good thing for consumers (and workers) but I have my doubts. We, the shoppers are already doing a large part of the work with the ever-disappearing human-manned check-out stations and absorbing the $$ mistakes when self-check-out scanners fail to detect a sale price.

sigh...

[DURHAM D]

23. I shop at a Kroger affiliated grocery store.

I get fuel points for every dollar I spend. The store has a restaurant, a pharmacy, a jewelry store, a walk-in clinic, a clothing department, furniture and some electronics. The fuel points can be spent at their filling station.

The pharmacy gave 500 fuel points for the covid vaccination.

For every dollar spent you get one fuel point. For every 100 points you get 10 cents off a gallon. For the past three months they have been giving double fuel points for some reason.

The best part - I have been paying less than $3 per gallon of gas for most of the past 2.5 years.

[FoxNewsSucks]

25. Those affinity programs are nothing more than a tactic to keep people from going elsewhere

There's no real discount, considering Kroger pricing compared to other places' pricing. Overall, Kroger still extracts more money from each customer, no matter how good those points make the customer feel.

Straightforward, simple pricing makes for easy comparison to get the best deal.

Also, every one of those departments - restaurant, Rx, jewelry store, clinic, clothing etc represents what could be a locally-owned business. What could be a local small business owner is instead a $18/hour department head, and profit going to a bank account in another state instead of being spent locally.

I try very hard to never patronize corporate chains. And by paying attention it's not more expensive to do so.

[DURHAM D]

28. The only other shopping option in this town is Walmart.

This is a small town - less that 40K.

This grocery store chain started in this town.

Facts can be such a bummer.

[FoxNewsSucks]

31. That's pretty much how it is all over Kansas

Towns too small have no grocery store, towns around 3-5k population might have a local store, anything bigger has been taken over by the corporate stores.

It really sucks.

[Kaleva]

66. I'm a frugal shopper and local stores can't compete against national chains

[SalamanderSleeps]

26. I saw a deer once.

[DURHAM D]

29. What is this supposed to mean?

Truth hurts?

[SalamanderSleeps]

33. I saw a deer once. Means "painfully obvious."

Irish people talk in code.

[DURHAM D]

34. No idea what you are trying to say.

Is there a reason why you speak in code?

Are you lost?

[SalamanderSleeps]

36. Is there a reason why you speak in code?

Note being; and I won't take offense if you don't care for my opinion.

People don't starve in my other country.

I'm not lost.

I am however disappointed when people in the U.S. subscribe to the notion that if you don't have a job you don't deserve to eat.

Is that clear enough?

My grandmother use to say, "you can't sleep in the ocean."


Sorry that my tiddle did meet your expectations.

[DURHAM D]

37. You poor thing...

[SalamanderSleeps]

41. Poor thing? ... Someone or something to be pitied.

I have two families in two different localities.

Both camps trust and love me even though my accent matches with neither.

You've hurt my feelings.

Take that with your day.


Regardless, if you ever need a hand mine is yours.


Just another adorable feature of being Irish.

Just another adorable feature of being human.

[bedazzled]

51. I think you are ADORABLE

If you can't travel, hang with people from other places!

Have an awesome weekend!

[Dysfunctional]

46. Considering that probably only Irish people knew what you meant,

what you wrote was meaningless unless you only wanted Irish people to understand you.

[SalamanderSleeps]

53. meaningless?

My grandmother was born in 1886.


She had another saying, "Just because the cat has her kittens in the oven doesn't make them biscuits."

136 years after her birth people still get what her mother probably told her.

But then, very few understand that Irish people don't think in English and probably never will.


“The great Gaels of Ireland are the men that God made mad, For all their wars are merry, and all their songs are sad.”

― G.K. Chesterton,

[Ford_Prefect]

27. Albertson's in our region is a good standard grocery store. The buy by wire crowd aren't here and

There's no reason to think they will be. The urban landscape may be different as far as competition goes. There is a very well to do work from home crowd who have recently moved here. They add up to about 3-5% of the marketplace. I don't see that as a motivator to change how the rest of us pedestrians purchase.

I used to shop at Kroger in NC in a small town. The choices and prices reflected that. What Kroger would like to have in urban high volume stores is quite different from what we had in our local. We do not need a cappuccino bar or fresh scones next our daily fruit and veg. We certainly don't want Starbucks style pricing.

There are good economic and environmental reasons to have small local stores. We kicked Walmart out of town when they came to promise cheaper goods and groceries. They wanted the kind of box store that would feed and service the whole of the lower valley. The economics of that concept don't work here, neither does concentrating all that traffic in one location. Some people in the Bitterroot have a 50 mile one-way drive to get to groceries in the nearest town. To centralize those purchases and add another 30-40 miles to the trip is just not on. Neither is turning the valley into another suburban sprawl zone to suit merchandising.

[QED]

30. We have Winco here.

It's employee owned and the food prices are generally lower than the larger chain stores.

[MontanaMama]

32. Damn. We have four Albertson's in our little city.

We nicknamed the one closest to my house “Meth”. The other three are Mid-town Meth, Northgate Meth and Southside Meth. That tells you all you need to know about our local Albertson’s. If Kroger is as bad as you all are saying on this thread…the future doesn’t look bright. We had a couple locally owned Fresh Markets that were bought by Yokes…prices went crazy. Another local grocery, the Orange Street Food Farm was also just bought by Yokes…same thing. I mostly shop at a little employee owned organic grocery but still need to hit one of the big stores here and there, unfortunately.

[AZSkiffyGeek]

39. My experience is that Kroger is cheaper overall

But Albertson's has better deals and better service inside the store. Kroger's pick-up is better though. And it is usually better stocked.

[AZSkiffyGeek]

38. So in my neighborhood...

There are 5 Fry's (Kroger) within four miles.
There is an Albertson's, and there are three Safeway (also Albertson's).

Yay variety...

[IronLionZion]

42. Kroger owns lots of regional chains

They are the largest grocery company in America. They own Harris Teeter here in the DC area. Vitacost is quite excellent for organic items.

https://en.wikipedia.org/wiki/Kroger#Chains

[FakeNoose]

43. Doesn't affect our area in Western PA

Very few Krogers' left here in the Pittsburgh area. Giant Eagle has just about run them out of town. I don't believe we ever had Albertsons' here.

Our 2 biggies are Giant Eagle and Shop N Save. Their biggest competitor (these days) is the Walmart grocery store. Also Aldi's seem to be popping up everywhere but I believe they belong in the "specialty" category.

[Yo_Mama_Been_Loggin]

44. So that means they'll be running 4 grocery chains in western Washington.

Fred Meyer, QFC, Albertsons and Safeway. Albertsons bought ought Safeway a few years ago.

While I like Fred Meyer (there's one within walking distance of my house), I don't like the idea of one corporation have that much control of business.

[Dysfunctional]

47. As a teen, I always wanted Stop and Shop and A and P to merge.

[ificandream]

48. I remember those two well from my time on the East Coast.

And I love hearing the continued references to Star Market on the Boston Red Sox games. Very nostalgic.

[BlueTsunami2018]

50. Monopolies are bad for consumers.

This kind of shit shouldn’t be allowed.

[cstanleytech]

52. I suspect that they will be required to sell off some of the stores to get approval for the merger.

Assuming of course that it is not entirely opposed by the feds.

[LudwigPastorius]

56. Yay! Less competition, higher prices!

They should just take the anti-trust laws off the books. It's not like the government bothers to enforce them anymore.

Makes me long for the days of the smaller groceries, like The Mad Butcher.

(...because who doesn't want to shop at an establishment represented by a violently insane man wielding a surgically sharp knife?)

[Yavin4]

58. This is why there's so much inflation.

No competition.

[Yo_Mama_Been_Loggin]

60. Bernie Sanders and Elizabeth Warren blast the $25 billion merger between grocers Kroger & Albertsons

one calling it an 'absolute disaster' for consumers

A merger between Kroger-Albertsons would result in higher food prices of US consumers, according to Senators Elizabeth Warren and Bernie Sanders.

The grocery store chains announced Friday that they've entered into a merger agreement that values the combined company at about $24.6 billion. The merger would create one of the largest grocery store chains in the US — combined, Kroger and Albertsons operate 4,996 stores nationwide, though the merger would see as many as 375 of those stores spun off and others sold to competitors.

"At a time when food prices are soaring as a result of corporate greed, it would be an absolute disaster to allow Kroger, the 2nd largest grocery store in America, to merge with Albertsons, the 4th largest grocery store in America," Sanders tweeted on Thursday, the Vermont senator adding that the Biden Administration "must reject this deal."

In an interview with MSNBC on Thursday, Warren alleged that the US had failed to exercise antitrust laws for decades, allowing for more concentration of power and soaring profits for corporations.

Link to tweet

https://www.msn.com/en-us/money/companies/bernie-sanders-and-elizabeth-warren-blast-the-25-billion-merger-between-grocers-kroger-and-albertsons-one-calling-it-an-absolute-disaster-for-consumers/ar-AA12XRUy

[The Jungle 1]

62. We spend less of our income on food than probably any other country.

Our entire food processing system is government controlled.
It is not capitalism and it is not free enterprise. We have a 500 billion farm bill that controls how and what food is produced.
I am not complaining just pointing out the facts. Farming is a profitable business in America. Farmers make a good living with a high income.
Historically keeping food cheap is how you keep people quiet.

[BumRushDaShow]

63. The 5-year appropriation commonly known as the "Farm Bill"

the current one being this (due to expire next year and currently under discussions for renewal) -

H.R.2 - Agriculture Improvement Act of 2018

has nothing to do with what wholesalers, let alone retailers (i.e. "supermarkets" ) charge. It was designed to not only support those who grow farm produce/raise livestock and poultry, but also provide vital food assistance to the needy through SNAP/EBT (formerly "food stamps" ) as a means for government "paying these goods forward" (way back in the day, it was to efficiently handle the "excess" ) to those most in need.

The current version was passed under the previous administration and under a trifecta of GOP control Presidency / House (just before Democrats took that chamber back) / Senate. A number of price supports for farmers were repealed at the time.

The problem in this case is at this corporate retail level and how they set their prices.

ETA - The "Farm Bill" only deals with "unprocessed" foods. Anything that is "processed" is NOT covered by anything in the "Farm Bill", and is not regulated by USDA, but is under the purview of FDA (which although under HHS, gets its appropriations under the Agricultural and Other.." appropriations bill). Likewise, seafood is not USDA but split among multiple agencies including FDA (if processed like breaded or for organoleptic analysis for decomposition), NOAA, which is under the Commerce Department and Fish and Wildlife, which is under the Department of Interior).

[The Jungle 1]

65. Yes I am somewhat off the main topic

Yes 80% of the farm bill is spent on SNAP.
However corn, soybeans, wheat, cotton, and rice are the crops subsidized and controlled by the farm bill. The processed sugar industry also gets massive subsidies and sugar is killing us. Their subsidies are not direct. The amount of crop subsidies is not uniform across crops and is highly concentrated among a select few. Fruit and nut producers do not get much money. Milk producers do get subsidies of around 5 billion. These subsidies do benefit the wholesale side of our food production indirectly by keeping the raw material and feed costs low.

My point is that so many people say they hate socialism. Except for their socialism. Just try and take those crop subsidies away. Or try and end government subsidized crop insurance. The farmers will be outraged. But they hate all other socialism and tell us they don't need no stinking government help. They want us to pull on our boots and stop taking government handouts. While they keep getting their pockets lined with our dollars. Clearly my point did not come through very well. I point this stuff out but then I chastise myself because I want America to stand together and stop nipping at each other.

So our food prices are low. However we are just paying the cost out of our other pocket.
I have no problem with SNAP. I demand we feed hungry people.

[BumRushDaShow]

67. I agree that pretty much every other country in the world subsidizes their agriculture

However those countries also promote government-sponsored "price controls" for finished products and that "socialism" is designed to reduce that excessive difference between what the farmer gets paid for their goods (often a pittance) and what the CEO of the retailer gets after extracting maximum profits from the cost differential for what they pay (little) and the cost that they can sell it for... unlike our system of defaulting to "what the market will bear" (or will be forced to bear when they "price fix" ).

This is why some of these guys often get hauled in front of Congress and/or charged with illegal "price fixing" at the retail level.

In fact, the "price fixing" isn't only relegated to the retailer but also happens with the corporate farms and processors (who get subsidies from the Farm Bill but are often engaged in price-fixing) - e.g., Smithfield (which is owned by a big Chinese multinational) just settled one case over the summer - https://www.mprnews.org/story/2022/07/06/smithfield-foods-settles-pork-pricefixing-lawsuit-for-42m

There are cases pending from other corporate food processors/distributors as well.

What tends to trigger the high prices abroad is their VAT (Value Added Tax) and the fact that they just don't have the type of land and climate that the U.S. has that allows us to grow or raise large quantities of just about any type of food in the world - including anything that would require tropical conditions. I.e., we have access to a much bigger supply than most.

I posted this back in April - https://www.democraticunderground.com/?com=view_post&forum=1002&pid=16633596

The U.S. (including all of its territory, both CONUS and OCONUS) can grow and raise almost anything in the world - and that includes tropical plants. For example neither Ukraine nor Russia can grow oranges or lemons or limes as a sustainable crop, and the same pretty much applies to a degree to sugarcane. But the U.S. can and does.

The U.S. consistently ranks in the top 10 for wheat for export.



(and I do "bake" and know about the different types of wheat thanks to King Arthur Flour, recently renamed "King Arthur Baking Company" )

And we are top for corn -



It's not like there is no one to step up but I think aside from (corporate) farms here converting to biofuels, the pandemic ended up having many of them with completely full silos of product that they could not process and thus that surplus not only meant no profit, but in many losses. So the reticence is there.

And with meats -

Beef -



Poultry



Pork



And in the top 10 for seafood -



I won't even go into the orchards...

But just like fuel oil is a "commodity" that gets traded and has "futures", so too are "beef" and "pork bellies", and "corn" and "wheat", etc. And the potential for a whole lot more $$$$$$$$ for the corporations is just staring them in the face.

And included the below in a different thread last May - https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2920586

ETA this ditty - https://www.bloomberg.com/graphics/2018-us-land-use/

[The Jungle 1]

68. That is a lot of good info

I am wondering about the map because it does not show farming in Pa. There are 7.3 million acres of farm land in Pa.

The dairy industry is price controlled. USDA, Agricultural Marketing Service is who administers it. A classified pricing system and revenue pooling are two key elements.

The sugar industry also has price controls that directly affect finished products. The government controls the sugar market through a two-tiered tariff system that allows US growers to provide about 85% of the market and keeps prices artificially
high. Why?

Any import controls will influence pricing.

All I am saying is our entire food industry is controlled by our government and that is socialism. Which farmers say they hate. I don't have a problem with socialism and I like my SS and Medicare.

[BumRushDaShow]

69. I think that map is sortof showing "total acreage blocks" by category

vs actual geographic locations of all of those categories (although in some cases, it is placing those "blocks" where most of the acreage in those geographic areas are associated with a category).

And regarding the milk pricing (and as a note, FDA handles milk quality/safety), the prices are basically the "floor" (minimum) as a commodity price. What the retailer eventually charges is (as usual) "what the market can bear". The intent was to make sure the dairy farmer got a fair price with a requirement that wholesalers/distributors would pay at least the minimum for the bulk product. Those buyers (distributors) will then process (e.g., homogenize/pasteurize) and package the bulk (e.g., tankers full of milk) into institution-sized and/or consumer-grade retail units for sale at some markup.

Here's a nice summary of the history of the price supports.

The thing to note when indicating "our entire food industry is controlled by our government" is that this is ONLY true and applicable for control for the how the source is handled, NOT for what eventually reaches the table once it leaves the source, and is further processed and distributed, so the "socialism" is limited. Then it becomes "free market".

There is an agency that handles some of that - Commodity Futures Trading Commission, whose original mandate was to oversee the agricultural trade, but is often involved in other financial market transactions. A little history of them here (and that agency's appropriations also come under the Agriculture appropriations bill along with USDA and FDA).

The CFTC and SEC have MOUs with each other for who covers what as a FYI (since they do have some overlap but were given different roles by law). This is a good summary of both and how they interact/differ.

[The Jungle 1]

71. So I will go with this.

If the price of crude oil was controlled by our government wouldn't all fuel prices be government controlled? There is no free market when the raw material is price fixed.
I think we all know that fuel prices are not free enterprise now.

I believe the only way a farmer can say they are operating in a free enterprise market without government pricing is to market their product from field to table.
Which is what some farmers are doing. I have many farmers in my area that are selling meat, eggs, and produce from their home That is an end run that I support. Cut out the middle man and we then have capitalism in food production. Co-op farming is another good system. However many farmers view them as unions. They also have problems with capital.

Sugar production is the product that is all socialism. Plus it is killing us. Processed sugar may be as unhealthy as tobacco.
Bio fuels are operated with total government control. We are forced to buy their product and the product is produced with government subsidies. Tax breaks, grants, loans, and loan guarantees. Total socialism which was started by republicans.

[BumRushDaShow]

74. Well in your example

the issue with fuel is the dearth of "processors" (refineries), so it is still "free market" when industry itself chooses to purposely limit the finished product supply (heating oil/gasoline/diesel). You might recall years when Hugo Chavez would have Citgo provide "free" heating oil to eligible low income individuals. Apparently that program was spearheaded by Joe Kennedy Jr and is now going with solar (for use of electricity for heating vs oil).

And regarding this -

I believe the only way a farmer can say they are operating in a free enterprise market without government pricing is to market their product from field to table.

Actually in this case, if you have government directly subsidizing the farm and they sell directly to the public, THAT bypasses the "middlemen" who trigger much of the price gouging in a "free market" environment. But in this case, the farmer would need to be an independent and not part of a "corporate" farm system (where in that "corporate" case, that capitalist-minded "private corporate entity" is controlling the means of production).

Where I live, there has been a co-op market here for the past 50 years, where in past decade or so, they expanded into a couple small supermarkets at other locations. Participation in that co-op required member donation and a work (in the store) requirement. I have seen more and more seasonal "co-op" arrangements where people can "buy shares" and receive produce in return.

I get what you are trying to do with the argument but in reality, the better examples for "socialism" (outside of the obvious Social Security and Medicare) is public education and public safety and even the public roadways, where taxes by the community help to support these services. The GOP wants to eliminate the collective community contribution towards services benefiting the whole (through "taxes" ) and instead relies on an "every one for themselves" model. So if you want a service, then you pay for it individually yourself, and it is only for you.

The GOP instead prefers to eliminate "public" anything (e.g., charter schools that would eventually completely transition to private education), private roads, private security, and private fire protection - the latter I recall seeing all kind of stories about like this.

[The Jungle 1]

75. Yes you understand my issue with republicans crying about socialism.

The right cries about socialism but they love their socialism.
Farming is only one smaller part of the socialist system we embrace and it is not my intent to pick on farming.
Because of the huge amount of corporate welfare we cannot say we are a capitalist economy. We just aren't. Our government picks the corporations that will be given our money. Why do we give socialist corporate welfare to oil companies? Why do we build stadiums for privately held sports teams. The list is endless.

Socialism: a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.
Our government is doing just that with corporate welfare. Yet republicans never cut any corporate welfare. They do scream and point to social programs as a horrific example of horrible socialism while holding their hand out. It just gets old.

There is a growing republican movement to cut SS and Medicare. If republicans get control of the house they want to shut down the government unless we agree to cutting SS and Medicare. However there is no talk of cutting socialist corporate welfare.

I have fun with my younger right wing friends. They talk about cutting SS and Medicare and I agree. But then I explain that I want them pay to educate their own kids and end the dependent deduction. Why should I have to pay to feed and educate their kids. I win the round. They never understand just how much of a government handout they get. But they don't want to pay for my SS and Medicare. Which I have actually already paid for.

We give socialist corporate welfare to many industries including oil, agriculture, housing, farm exports, automobiles, and health care. Everybody has their hand in the till but everybody wants to cut the other guys handout.

[BumRushDaShow]

76. Why do we give socialist corporate welfare to oil companies? Why do we build stadiums..."

Because it is "sold" (capitalist "marketing" ) as being a "symbiotic" and "synergistic" relationship between employee and employer, whereas in reality, it's more a parasitic one the way it has been implemented.

When we moved away from "cottage industries" by allowing a consolidation of industries (like you see with the OP), you now leave your employee dependent on the availability of a job from one of these big corporate entities, who have now been given the leverage to extort.

I even posted in this thread about how as a kid in the '60s, we would go to a Woolworth's and supermarket that were located along a street that was set aside for shopping that was not a "strip mall". It was basically a main thoroughfare through a residential neighborhood that was a known designated "shopping district" for the area. The "mall" concept basically replaced that model, although along many of these old shopping streets, there has been a slow but steady revitalization, and return of smaller stores (although some have been quirky niche products). Some of the larger department stores have even experimented with making smaller versions of their stores to open on such neighborhood shopping districts (like Target).

What prompted much of this was Raygunomics and the knee-capping of the SBA. So the government has to subsidize to essentially provide a payoff for the large multinational companies to hire people.

Right now you have a crises in the healthcare facility (hospital) sector where hospitals aren't owned/run by non-profits but by hedge funds and vulture capitalists whose main goal is to "turn a profit", no matter what "business" they are investing in, and that should NOT be permitted for certain industries that impact our lives like healthcare.

In the case of cutting SS & Medicare, the ad from a decade ago that scared them the most needs to be updated and re-issued -

[The Jungle 1]

77. I remember that ad. Run it again.

[Auggie]

78. You have a link about the "government control" claim?

"Food processing" and "farming," are two different things, by the way.

And huge "family" farms, like California's Stewart Resnick (Wonderful Pistachios) make "good" money. Small family farms do not.

I work with family farms.

[The Jungle 1]

80. BumRushDaShow and I beat that dead horse for several days.

If you refer to our posts you will get a wealth of information and understand our positions.
Basically my position is I am tired of people screaming about socialism when they directly benefit from socialism.

[Auggie]

82. Don't link big ag to small family farms

[The Jungle 1]

83. Nice delivery. Yea real nice.

Don't tell me what to do!
This was a real nice conversation, wonder what changed.

[Raine]

72. VERY bad news for consumers. 🙁

higher prices, less choices, very sad that monopolies like this are allowed.

[JCMach1]

73. Tom Thumb here in TX is owned by Albertsons... Wonder if they will be spun off