Afriend of mine – let’s call her Tara, because that’s her name – visited relatives in Michigan over the Christmas holidays, and noticed the price sticker for that evening’s turkey dinner proudly displayed on the refrigerator door.
It read $4.
Not $4 a lb. – $4 for the whole turkey.
Her hosts were ecstatic. They thought they’d snagged the bargain of the season and were eager to celebrate it.
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But the price stuck in Tara’s craw.
“I knew it was somehow wrong to be giddy over a $4 turkey,” she said later, “but I didn’t exactly know why.”
It turns out she was struggling with the lure of cheap food. We’re all drawn into supermarkets by what are called loss leaders – that is, products the retailer purposefully sells at a loss just to get shoppers into the store. Once they’re in, the thinking goes, they’ll buy enough other regularly priced items for the store to still make a profit.
Loss leaders are part of our overall shopping culture. Consumers get a deal, and maybe stores benefit at the till, where they’re clamouring for sales. Food retailing is highly competitive in Canada; we continually rank among the top five countries in the world that devote the least of our take-home pay to food.
But even though Canadians (and Americans) dedicate comparatively little to our food budget, rising food prices are still consumers’ biggest concern. So from purely a price perspective, Tara’s relatives can hardly be blamed for rejoicing about their $4 Christmas miracle.
Here, though, is the difference.
When loss leaders are dry goods, such as paper towels or toilet paper, few people along the supply chain will experience hardship or in fact hardly even notice.
However, it’s a different story when the loss leader is something that can be connected to your neighbour’s farm, like meat or vegetables … because somewhere along the line, there’s a chance that farmers are getting shafted.
Staple foods sold as loss leaders create an expectation that they should always be bargain priced. And unless farmers have a bottomless treasury behind them – like some U.S. farmers have lately, thanks to their president throwing billions of dollars of subsidies at them – that’s just not possible.
Farming is a business, and businesses have to be profitable.
But the U.S. Christmas turkey scenario underlines how Canadian farmers are falling behind and are calling on the federal government for help.
Feed is a livestock farmer’s biggest expense. U.S. farmers who buy feed for their animals have been getting a bargain since the Trump subsidies began. They offset the true cost of feed production and allow U.S. farmers to sell it for less. Feed producers don’t need to make as much money from their crop when they’re getting big subsidy payments from Trump.
As a result, the cost of producing animals, like turkeys, goes down in the U.S.
Canadian grain producers don’t have the same kind of support as their American counterparts. But because the U.S. is such a huge grain exporter, its price is the price that everyone else is forced to charge.
In Canada, the price and production of turkey is controlled. That means farmers here have more latitude to implement animal welfare and food safety measures. It doesn’t mean turkeys in the U.S. are treated inhumanely or that their meat is not high quality. But the edge goes to Canada.
So what’s wrong with a $4 turkey?
There’s Tara’s next dinnertime discussion.