PRESIDENT CARTER INTENDS to summon the supermarket chains and the meat packers to the White House and adjure them fiercely to lower their prices. You will want to wish the president good luck in this venture. But you won't want to wait for any remarkable results. Nowhere is inflation more intractable, and less responsive to political intervention, than at the grocerty store.
Prices at the farm have been falling throughout the spring, while prices at the check-out counter are still going up. That divergence gives the administration a chance to defend the consumer without attacking the farmer - and an opening like that is much too good to miss. Since businessmen do not like to be attacked by the White House, it's quite possible that Mr. Carter will extract at least temporary price concessions from them. But the food industry is more competitive than most, and there is not a great deal in the way of sudden windfalls to be turned back to the customers.
Food processors and retailers generally follow a standard strategy in regard to profit margins. When the price of foodstuffs is rising at the farm, the industry usually passes it through with no increase in the margin and sometimes a reduction. Then when the cycle turns at the farm and commodity prices drop, everybody along the long chain of manufacturers and packers and distributors reestablishes the traditional percentage margin. That is what's going on now, and that is the process that Mr. Carter is trying to slow down. But the margins in the food business are small in relation to sales, and even a hard squeeze is unlikely to produce dramatic effects.
But since the president is renewing his attention to food prices, there are several pending decisions that deserve his attention. A group of Florida growers is currently trying to cut down the imports of fresh vegetables from Mexico. In the winter, those imports constitute half of this country's supply of tomatoes, cucumbers and so forth. The Florida growers are using the anti-dumping laws to try to close out the Mexicans. The United States government opens negotiations with Mexico next Tuesday. Any agreement that diminishes the volume of these imports, or raises their prices, will mean higher food costs throughout the country next winter.
Congress is about to pass a protectionist bill that will raise the price of sugar. Perhaps the president ought to reconsider the administration's endorsement of it. Congress is also working on a beef import bill. The administration might try pushing for larger import quotas, to hold down domestic prices.
Still more important, there has been a poor harvest in much of the world this year and, led by the Russians, other countries are buying extraordinary volumes of American grain. The prices of wheat and corn are already higher by one-third than last year. Nutritional standards are rising throughout the world and international competition for American grain is sharpening.
To press the food stores to restrain their margins may help a little bit, for a little while. But the main reasons for rising food prices lie much farther back in the supply system, where no president can reach them easily or quickly.