DiscoverThe Indicator from Planet MoneyIs chicken getting cheap? And other questions
Is chicken getting cheap? And other questions

Is chicken getting cheap? And other questions

Update: 2024-06-102
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This episode of Planet Money's Indicator tackles listener questions about the economy. First, they address a listener's observation of discounted chicken prices despite bird flu news. While chicken prices are still up from a year ago, the high beef prices due to smaller cattle herds and drought make chicken appear cheaper in comparison. Additionally, lower feed prices for chicken are contributing to some price decreases. Next, the episode explores the idea of regional interest rates. While the Federal Reserve uses a single interest rate to guide the economy, Monica Deval, a senior fellow at the Peterson Institute for International Economics, argues that a centralized rate is crucial for providing a clear signal to the market. However, she acknowledges that interest rates are localized in practice, with banks adjusting borrowing costs based on local market conditions. Finally, the episode examines whether election spending is an indicator of economic health. Michael Kang, a law professor at Northwestern Pritzker School of Law, suggests that while economic strength might influence individual donations, the primary driver of increased spending is deregulation of campaign finance, particularly the rise of super PACs and their ability to spend unlimited funds on political campaigns. The episode concludes by noting that the increased competition in close races, like the current one, often leads to even higher spending.

Outlines

00:00:00
Chicken Prices: A Local Phenomenon or a Larger Trend?

This Chapter explores a listener's observation of discounted chicken prices despite bird flu news. While chicken prices are still up from a year ago, the high beef prices due to smaller cattle herds and drought make chicken appear cheaper in comparison. Additionally, lower feed prices for chicken are contributing to some price decreases.

00:00:13
Regional Interest Rates: A Sharper Tool for the Fed?

This Chapter examines the idea of regional interest rates. While the Federal Reserve uses a single interest rate to guide the economy, Monica Deval, a senior fellow at the Peterson Institute for International Economics, argues that a centralized rate is crucial for providing a clear signal to the market. However, she acknowledges that interest rates are localized in practice, with banks adjusting borrowing costs based on local market conditions.

00:00:35
Election Spending: An Indicator of Economic Health?

This Chapter investigates whether election spending is an indicator of economic health. Michael Kang, a law professor at Northwestern Pritzker School of Law, suggests that while economic strength might influence individual donations, the primary driver of increased spending is deregulation of campaign finance, particularly the rise of super PACs and their ability to spend unlimited funds on political campaigns. The episode concludes by noting that the increased competition in close races, like the current one, often leads to even higher spending.

Keywords

Federal Reserve
The central bank of the United States, responsible for managing the money supply and interest rates to promote economic stability and growth. It operates independently of the government and is led by a Board of Governors appointed by the President and confirmed by the Senate.

Interest Rates
The cost of borrowing money, expressed as a percentage of the principal amount. Higher interest rates make borrowing more expensive, which can slow down economic activity. The Federal Reserve sets the federal funds rate, which is the target rate for overnight lending between banks, and this rate influences other interest rates in the economy.

Inflation
A general increase in the prices of goods and services over time, which reduces the purchasing power of money. The Federal Reserve aims to keep inflation at a low and stable level, typically around 2% per year.

Super PACs
Political action committees that can raise unlimited funds from corporations, unions, and wealthy individuals to support or oppose political candidates. They are not subject to the same contribution limits as traditional PACs and have become increasingly influential in recent years.

Citizens United
A landmark 2010 Supreme Court case that ruled that corporations and labor unions have the same First Amendment rights as individuals and can spend unlimited funds on political campaigns. This decision paved the way for the rise of Super PACs and increased spending in elections.

Bird Flu
A highly contagious viral disease that affects poultry, including chickens, turkeys, and ducks. Outbreaks of bird flu can lead to significant losses in poultry production and affect the price of poultry products.

Beef Prices
The price of beef, which is influenced by factors such as supply and demand, cattle herd size, drought conditions, and feed costs. High beef prices can make other meats, such as chicken, appear more attractive to consumers.

Drought
A prolonged period of abnormally low rainfall, which can have a significant impact on agriculture, including livestock production. Drought conditions can lead to smaller cattle herds and higher beef prices.

Feed Prices
The cost of feed for livestock, which is primarily composed of corn and soybeans. Lower feed prices can reduce the cost of raising livestock and potentially lead to lower prices for meat products.

Q&A

  • Why are chicken prices seemingly cheaper despite bird flu?

    While chicken prices are still up from a year ago, the high beef prices due to smaller cattle herds and drought make chicken appear cheaper in comparison. Additionally, lower feed prices for chicken are contributing to some price decreases.

  • Should the Federal Reserve use regional interest rates?

    While the Federal Reserve uses a single interest rate to guide the economy, Monica Deval, a senior fellow at the Peterson Institute for International Economics, argues that a centralized rate is crucial for providing a clear signal to the market. However, she acknowledges that interest rates are localized in practice, with banks adjusting borrowing costs based on local market conditions.

  • Is election spending an indicator of economic health?

    Michael Kang, a law professor at Northwestern Pritzker School of Law, suggests that while economic strength might influence individual donations, the primary driver of increased spending is deregulation of campaign finance, particularly the rise of super PACs and their ability to spend unlimited funds on political campaigns.

Show Notes

We are back to answer your questions that you, our listeners, have been sending. On today's show, is chicken actually getting cheaper? Why doesn't the Federal Reserve use different interest rates around the country? And: is election spending an indicator of economic health?

If you have a question you'd like us to answer, email us at indicator@npr.org.

Related episodes:
Can an old law bring down grocery prices? (Apple / Spotify)
How political campaigns raise millions through unwitting donors
How mortgage rates get made
The rat under the Feds hat (Apple / Spotify)
The interest-ing world of interest rates (Apple / Spotify)

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Is chicken getting cheap? And other questions

Is chicken getting cheap? And other questions