Farmers Union report links high grocery prices to corporate consolidation

The grocery aisles in Fargo have seen a noticeable shift in prices over the past few years, and a new report from the Minnesota Farmers Union Foundation is shedding light on the complex web of corporate consolidation that is driving up costs for consumers. According to the report, titled 'The Secret Behind High Grocery Prices,' corporate practices like surveillance pricing, price discrimination, and price fixing are major contributors to the rising costs at the checkout counter.

Justin Stofferahn, antimonopoly director for the Minnesota Farmers Union and author of the report, argues that while tariffs and geopolitical events like the war in Iran have played a role in recent price increases, they do not fully explain the extent of the problem. 'Going back to the status quo doesn’t address these more structural issues,' Stofferahn said, emphasizing the need for state lawmakers to take action on these structural problems. He explained that attributing price hikes solely to external factors overlooks the fundamental power dynamics at play within the food supply chain – a chain increasingly dominated by a handful of powerful corporations.

The report cites Bureau of Labor Statistics data showing that grocery prices in the Minneapolis-St. Paul-Bloomington metro area have increased by more than 34% since 2020, significantly outpacing overall inflation. This trend is particularly concerning for farmers, who are seeing their share of each food dollar drop from about 50 cents in the 1950s to just 15.9 cents today. Stofferahn attributes this to corporate consolidation, which has left farmers with less bargaining power and fewer opportunities to secure fair prices for their products. This shrinking farmer’s share isn’t just an economic statistic; it represents a decline in the viability of family farms, a cornerstone of rural communities like those surrounding Fargo and Moorhead. As farmers struggle to maintain profitability, the long-term consequences include potential land consolidation, loss of agricultural expertise, and a weakening of the rural economy.

One example of corporate consolidation is highlighted in the report: a 2025 Federal Trade Commission complaint against PepsiCo, which alleged that the company kept Walmart competitors from pricing soft drinks too closely to Walmart. PepsiCo denied the allegations, and the FTC ultimately dismissed the case. However, Stofferahn points out that Walmart’s significant market share—making up about 14% of PepsiCo’s 2025 revenue—suggests that such practices can have a substantial impact on smaller competitors. This case, while dismissed, underscores the lengths to which large corporations will go to protect their market dominance, often at the expense of smaller businesses and consumers. The FTC's dismissal, despite the allegations, highlights the challenges in prosecuting these types of anti-competitive behaviors, even when evidence exists.

The report also examines Agri Stats, a company involved in price-fixing allegations. According to the document, four companies control 54% of poultry processing, 66% of pork packing, and 85% of beef packing. These high levels of consolidation indicate a lack of competition that benefits large corporations at the expense of smaller grocers and farmers. This level of concentration in the meatpacking industry has significant implications for North Dakota, a state with a strong agricultural base. It limits the options available to local farmers, potentially forcing them to sell their products to these dominant processors at prices dictated by the corporations, rather than being able to negotiate for fairer terms. The Agri Stats case specifically revealed how data aggregation can be used to facilitate price coordination among processors, further exacerbating the problem.

The Impact on Fargo-Moorhead

The trends outlined in the report aren't just abstract economic concepts; they have a tangible impact on the daily lives of residents in Fargo and Moorhead. Local grocery stores are struggling to compete with the pricing power of national chains, and farmers are facing increasing pressure to produce more at lower costs. This creates a ripple effect throughout the community, impacting everything from local employment to the overall quality of life. The report’s findings resonate particularly strongly in a region with a deep agricultural heritage, where many families have direct ties to farming and food production.

Understanding Surveillance Pricing

The report’s focus on surveillance pricing is particularly alarming. This practice involves using shoppers’ personal data, often collected through loyalty programs and online ordering platforms, to set individual prices. The cited 2025 investigation showing Instacart prices ranging from $81.24 to $86.78 for the same basket of groceries at a St. Paul Target highlights the potential for exploitation. While the practice is relatively new, it raises serious ethical and privacy concerns. Consumers are essentially being charged different prices based on their perceived willingness to pay, creating a system where those who are less price-sensitive are penalized. This also disproportionately impacts lower-income individuals who may be more reliant on loyalty programs and online ordering for convenience and perceived savings.

Legislative Goals and the Consumer Grocery Pricing Fairness Act

Stofferahn’s advocacy for a ban on surveillance pricing in retail reflects a growing concern among consumer advocates and policymakers. The Minnesota Farmers Union’s top legislative goal for 2027 is directly aimed at addressing this issue. Beyond surveillance pricing, the group also supports the Consumer Grocery Pricing Fairness Act, sponsored by Rep. Emma Greenman, DFL-Minneapolis. This bill would require suppliers to offer all grocery retailers the same terms, ensuring that small grocers are not at a disadvantage compared to big box stores. The fact that local grocers report paying 70% to 90% more at wholesale than big box stores charge on the shelf demonstrates the significant disparity in pricing power.

Stofferahn also emphasized the need to modernize state price-fixing laws. The current laws, written over a century ago, were designed to address price-fixing schemes that involved physical meetings and explicit agreements. Today, corporations can “outsource their collusion” to third-party firms like Agri Stats, making it more difficult to detect and prosecute price-fixing activities. Updating these laws to account for modern methods of collusion is crucial for ensuring fair competition in the grocery market.

Looking Ahead: 2027 and Beyond

The Minnesota Farmers Union’s focus on 2027 signals a commitment to pushing for legislative action on these critical issues. However, the challenges are significant. Large corporations have considerable lobbying power and may resist efforts to regulate their practices. The success of these initiatives will depend on the ability of consumer advocates, farmers, and small business owners to mobilize and advocate for change.

Mark's Take

The high grocery prices in Fargo are a symptom of a larger issue: corporate consolidation that leaves farmers and small grocers struggling to compete. While it’s easy to blame external factors like tariffs and geopolitical events, the reality is that the market is being manipulated by large corporations. As a community, we need to advocate for fair pricing and support policies that protect small businesses. By doing so, we can ensure that the American dream of stable, loving households is not just a distant hope but a reality for all residents of Fargo.

It’s important to remember that every dollar saved at the checkout counter comes at the expense of someone else. As we move forward, let’s focus on creating a more equitable market where farmers, grocers, and consumers can thrive together. The future of our community depends on it. Supporting local farmers markets and smaller grocery stores is one tangible way residents can contribute to a more sustainable and equitable food system in the Fargo-Moorhead area. Furthermore, educating oneself about the issues highlighted in the report and contacting state representatives can amplify the call for regulatory reform.