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As the Labor Department releases its latest Consumer Price Index (CPI) report, a new analysis from government watchdog Accountable.US finds several of the largest U.S. food companies that have raised consumer prices during the pandemic have continued to report increased profits while spending billions on stock buybacks and shareholder dividends — with several companies increasing these payouts by triple-digit percentages. The findings are the latest indication that while inflation is slowing, the Fed’s single-minded policy of repeated interest rate hikes are doing little to contain the primary driver of rising costs — corporate greed. Worse, economists warn that more interest rate hikes could kill millions of jobs. 

While world food prices reportedly “fell in January for a 10th consecutive month, and are now down some 18% from a record high hit last March”, an analysis from Axios found national food prices were up by over 10% year-over-year in December 2022, with food at home prices rising by 11.8% nationwide and food away from home prices rising by 8.3%.” The disparity appears to be the result of a continued trend of corporate greed and profiteering from the big U.S. food industry. 

For instance, Accountable.US found Mondelez—the second largest U.S. food company by market cap—reported a 14% increase in net income for FY 2022, allowing it to spend $2 billion on stock buybacks and just under $2 billion on dividends. Meanwhile, Archer Daniels Midland—the fifth largest U.S. food company by market cap—reported $4.3 billion in net earnings for FY 2022, a 60.2% increase from 2021. Meanwhile, the company spent $1.45 billion on stock buybacks after reporting no buybacks in 2021. The company also spent nearly $900 million on shareholder dividends, a 7.8% increase from 2021. 

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Insatiable corporate greed by the biggest U.S. food companies explains why food prices continue to soar domestically while costs are stabilizing elsewhere around the globe. Big Food’s own earnings reports debunk claims that repeated price hikes on consumers could not be avoided. Supersized profits and billions of dollars in new payouts to wealthy investors show the industry didn’t have to mark up prices so high -- but too many chose to profiteer nonetheless. The food industry stands among other highly profitable industries like big oil and gas whose price-gouging practices has been undeterred by the Fed’s repeated interest rate hikes. The Fed is needlessly risking mass layoffs and a recession by quadrupling down on interest rate hikes that have failed to get to the root of inflation challenges – corporate greed.”

The big food industry is not known for self-accountability. That’s why the Biden administration and Congress needs to build on its work reining in corporate greed that remains a primary driver of inflation challenges, including ensuring companies that overcharge consumers finally pay their fair share in taxes.”

Accountable.US’ Director of Economic Security and Corporate Power, Liz Zelnick

The CPI report comes as Federal Reserve Chair Jerome Powell raised interest rates an 8th time since March 2022 despite a chorus of warnings from economists, union leaders, and political figures that staying this course could cost jobs or even lead to a recession. 

 

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