Last fall, at our neighborhood supermarket, we picked up a box of rice with five different price stickers on it. Each was a few pennies higher than the one underneath. That’s not such an unusual story anymore; peeling off the tags to find yesterday’s price has become a harmless sort of entertainment for the beleaguered food shopper, giving him the same sense of chronological revelation that a geologist gets from looking at a stratified butte. The shopper is the first to know we don’t live in a world of stable prices any longer.
But too often that is all he knows. What is behind the price on the supermarket shelf—other than another price, that is? What has actually made the price go up; who is getting the extra money? Is somebody profiteering?
What is going on? That question has been asked with numbing frequency about oil, sugar, and other commodities, though with a notable lack of conclusive answers. We decided to ask it about rice—one of the leaders in the grocery store inflation—partly because nobody else seemed to want to, and partly because what happens to rice matters to Texas. (Texas is one of five states which together consume 51 per cent of U.S. rice, and it also ranked second in rice production last year.) Rice also happens to be the staple food of about one-half of the human race, and thus is the most important single foodstuff on earth. Indeed, Fortune magazine recently suggested that the interconnected inflation and shortages in basic commodities may actually have begun with the catastrophically poor world rice crop of 1972, which sharply increased the demand for other grains like wheat.
Until recently rice was one of the most stable commodities around. Throughout the 1960s, long-grain white rice (the most popular kind) sold for 20 to 22 cents on grocery store shelves; as late as 1972, a one-pound box cost only 24 cents. Then, in 1973, rice began one of those helium-balloon ascents that have become all too familiar lately. In a single two-month period, the shelf price jumped more than it had in the previous thirteen years. As the accompanying graph shows, the price rose to an all-time high of 54 cents in July 1974, then