The Indicator from Planet Money

Episode•May 5, 2025•9 min

Trump's cuts come for food banks

The Beigie Awards are back to recognize the regional Federal Reserve Bank with the best Beige Book entry. On today's episode, we shine a spotlight on a Midwest food bank. Related episodes: Why Midwest crop farmers are having a logistics problem (Apple (https://podcasts.apple.com/us/podcast/why-midwest-crop-farmers-are-having-a-logistics-problem/id1320118593?i=1000675829534&l=vi) / Spotify (https://open.spotify.com/episode/7nbLrIBXZxVx8DjMhoCWSA)) How many times can you say uncertainty in one economic report? (Apple (https://podcasts.apple.com/us/podcast/how-many-times-can-you-say-uncertainty-in-one-economic/id1320118593?i=1000698936295) / Spotify (https://open.spotify.com/episode/495B7CgL6T7J6DhsHmqLSn)) For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org (http://plus.npr.org/). Fact-checking by Sierra Juarez (https://www.npr.org/people/g-s1-26724/sierra-juarez). Music by Drop Electric (https://dropelectric.bandcamp.com/). Find us: TikTok (https://www.tiktok.com/@planetmoney), Instagram (https://www.instagram.com/planetmoney/), Facebook (https://www.facebook.com/planetmoney), Newsletter (https://www.npr.org/newsletter/money). To manage podcast ad preferences, review the links below: See pcm.adswizz.com (https://pcm.adswizz.com) for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. Learn more about sponsor message choices: podcastchoices.com/adchoices (https://podcastchoices.com/adchoices) NPR Privacy Policy (https://www.npr.org/about-npr/179878450/privacy-policy)

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Transcript

0:01

Npr.

0:12

Waylon, I have a confession to make. I almost missed the publication of the Beige Book.

0:18

Well, Robert, you are in the circle of trust here, so you can tell us what happened.

0:22

So, I normally have the Beige Book on my calendar. I set aside the whole day to read the report, brew a pot of tea. I make a whole thing out of it. But there has been so much economic news lately. Tariffs on, tariffs off, stock market red, stock market green, that I somehow overlooked that the Federal Reserve had put out its most recent report of economic conditions across the United States.

0:43

It's like everything in life, right? The loud, bright things grab your attention. But the beige, it's quietly waiting for you when you need it. You could almost say that it deserves an award.

0:56

It's the Beijing Awards, our eight times a year salute to the art and science of telling stories about the economy. I'm Robert Smith.

1:06

And I'm Waylon Wong. It may not flash red or green, but the Beige Book abides. On this edition of the Beige Awards, we find that just as the US Is warming into springtime, an economic freeze is falling over the land.

1:21

Bundle up, baby. It's cold outside after the break. Always good to remind everyone how this award show works. There are 12 regional banks in the Federal Reserve System. Each one studies their local economy and brings back little stories of what they see. They publish them in the Beige Book. We give awards to the best stories.

1:43

Right. So in the last Beige Book, we noted that everyone was using the word uncertainty. And this time around, a new word caught our attention in the Beige Book. Freeze.

1:53

Yeah, like the proverbial deer in the headlights. Multiple businesses talked about a hiring freeze. Which is better than layoffs. Yes, but in order to keep the unemployment rate stable, the US economy has to add 100 to 200,000 jobs a month. A freeze is definitely bad news.

2:11

Yes, and even the good news parts of the Beige Book were still kind of bad news. For instance, we saw car dealerships reporting higher sales.

2:20

Good.

2:20

From people who wanted to grab a new vehicle before tariffs made them unaffordable.

2:25

Not good.

2:26

And one law firm reported increased business from clients.

2:30

Oh, that's promising.

2:31

Because they needed help navigating all the confusing policy changes coming out of D.C.

2:37

waylon, we just need to embrace the moment and stop sugarcoating it. The best entries from the Beige Book this time were the most depressing ones. For instance, I'd like to give a runner up award to a small entry from the Philadelphia Fed. You know those restaurant weeks where every restaurant in town offers some sort of deal?

2:54

Yeah, it's always like a prefix, right? Three courses for $17.76.

2:58

So patriotic. But unfortunately, this is the Philadelphia entry in the Beige Book. Quote, a significant number of restaurants chose not to participate in an annual Local Restaurant Week promotion because they couldn't afford to discount their menu items.

3:13

Oh, yikes. It must mean they're operating right on

3:15

the edge and we could all use a cheap meal right now. Right? But no matter. Let's perk up the mood with a little drum roll. And the winner of the Beijing Award.

3:25

The envelope, please. It's the Kansas City Fed.

3:31

Coming to the stage is not one, but two writers from the Kansas City Fed, Jeremy Hill and Stephen Howland. We spoke to them on April 25th. Congratulations, gentlemen.

3:40

Thank you, Robert. Thanks. It's exciting.

3:43

So I have to tell you, even though it is a virtual award, we only have one of them. Have you decided how you're going to split this?

3:48

Cut it in half.

3:51

Ah, very Solomonic of you. We are giving each one of you half an award for two very different entries in the Beige Book. One is a little bit more wonky than the other.

4:01

Let's start with the wonk. We've been talking endlessly on the indicator about price increases from tariffs and which products would be the most impacted. But Jeremy Hill, you noted that some firms are talking about increasing prices across the board. I will read the entry. Quote, contacts indicated passing rising costs to customers will occur over the next several months and anticipated goods prices will rise broadly as many suppliers are spreading cost increases across their entire product portfolios.

4:32

Right. So when firms are thinking about this right now, they shared with us it's about revenue stabilization. We had that recently during COVID where they got taken off guard and demand shift between one product line to another one and they're still not certain how things will shake out. So when they looked at the risk, it is best to start increasing on all those product lines according to those

4:54

firms, which I guess makes sense, right? Customers may be able to stomach smaller price increases everywhere rather than have one or two products be completely unaffordable.

5:04

Like the better of two bad options. And speaking of unaffordable, our other winning entry was about food banks. The Beige Book has been working real hard to expand beyond covering businesses and starting to include nonprofits and social service agencies. Robert, if you would read the quote.

5:23

Funding cuts from the USDA were highlighted as particularly impactful regarding services for seniors. Specifically, one pantry reported cutting back the amount of food they can give from three to five days of shelf stable food to two days of food every 30 days due to funding cuts. Stephen Holland, you wrote that line, and it's very specific. We always hear about food banks struggling generally, but this is a drop of five days worth of food to two days worth of food. What happened?

5:53

Yeah, so the USDA cut about $500 million from food banks, and that substantially impacted the amount of food that food banks could provide to their pant. So this particular food pantry was responding and trying to serve as many people as they can, but it's going to be less food that they can provide to each person.

6:13

The Trump administration cut $1 billion from USDA programs that provide fresh food for school lunches, and then also this money for food banks. They said the Biden levels of food assistance were unsustainable.

6:25

We wanted to hear what food banks in the region were doing to respond. So we called up one that provides food to 27 counties in Missouri and Kansas.

6:33

So my name is Stephen Davis, and I'm the president and CEO of Harvesters, the community food network.

6:39

Now, food banks always need more food. You never call up a food bank and they say, oh, no, we're good. We got everything we need right now. But Stephen Davis says it's especially bad this year.

6:49

Food is incredibly expensive. We all know that all the other costs have gone up. Rent, mortgages, health care costs. So your dollars are just not stretching as far. And often where people have to make sacrifices is on the food that they would purchase.

7:07

Stephen from Harvesters said they have a lot of different ways of getting food to give away everything from cans donated by community members to deals with food manufacturers to use stuff that would have gotten thrown out. The USDA budget cut really hurts because this was money they could have spent on staple foods that might not get donated.

7:26

He estimates that this will mean they will lose out on 2.4 million pounds of food.

7:33

So you think about 2.4 million pounds of food. We distributed 61 million pounds of food last year, but that's a meaningful amount of the food that we distributed that we could use to serve families that all of a sudden just went away.

7:46

And as we saw in the beige book, that can mean essentially, food rationing, giving out less food to families so they can serve more people.

7:54

Now, of course, Harvesters is going back to their donors and volunteers. They're hustling more extra food from manufacturers. But Stephen says he doesn't know what will happen if the money doesn't come

8:04

back or if the economy gets worse. Remember, it might be scary right now, but the unemployment rate in the US is still low. Who knows what the next beige book will bring?

8:15

Ah, the next beige book. Yes. It's June 4th. I have it marked on my calendar in my phone. I'm not going to forget it this time. And I wanted to say congratulations to our two winners from the Kansas City Fed, Jeremy Hill and Stephen Howland. The next beige book is gonna be a crucial one. You two aren't planning vacations or something before then? Well, I don't have any scheduled.

8:37

It's a year round job, right? We have to be engaged all the time. So vacations are on the side.

8:44

No rest for the Fed. I'm sure they get vacations.

8:52

This episode was produced by Indra Carreras with engineering by Sina Lofredo. It was fact checked by Sierra Juarez. Kate Concannon is our show's editor, and the indicator is a production of NPR.

Trump's cuts come for food banks

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