Wall Street Journal, March 20, 2008: A Run on Banks

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March 20, 2008; Page A1

Add another institution to those getting squeezed by America’s economic crunch: soup kitchens.

Across the country, groups that provide food to people in need are scrambling to make up for a loss of government-provided surplus items as commodity prices have soared. Surpluses have dropped as some commodities, like corn, are being turned into alternative fuels and others are going overseas as the weak dollar makes U.S. exports more palatable to other countries.

At the same time, food banks and soup kitchens say that people struggling with mortgage woes, rising gas prices and layoffs are increasingly turning to them for help.

To cope, food banks are being forced to purchase more food, cut back on the amount they provide or even trade local produce with other food banks. United Food Bank in Mesa, Ariz., recently got volunteers to pick oranges, grapefruits and lemons, some of which were swapped for potatoes from food banks in Idaho.

Culinary Challenges

Municipalities are offering tax breaks to food wholesalers and retailers that donate food. Local donations can come with culinary challenges: What exactly does a soup-kitchen chef do with a fragrant citrus fruit called Buddha’s Hand?

A big hit to food banks has come from cuts in fresh produce and canned food supplied through the U.S. Department of Agriculture’s surplus-commodity program, designed to help farmers. Such donations dropped to $58 million worth of food last year from $242 million four years ago. Donations from food manufacturers and retailers have remained steadier.

The government provides an additional $140 million annually to food banks through a mandatory program, but that program is purchasing less food as prices have risen.

[Groceries]1 HOW TO HELP

Find your local food bank and see how you can contribute or volunteer, through the Web site of America’s Second Harvest2, the nation’s largest charitable hunger-relief organization.

“There is a nascent crisis building,” says Chris Barrett, a professor at Cornell University, who studies food-assistance programs. “Demand for food-bank assistance is climbing rapidly when the resources are falling in dramatic terms because the dollars just don’t go as far.”

“Many food banks tell us demand is up more than 20% from a year ago,” says Ross Fraser, a spokesman for America’s Second Harvest, which distributes food through a network of 205 food banks in the U.S. Food banks generally warehouse and deliver food to soup kitchens and other local agencies that serve meals and provide bags of food directly to people in need.

A food bank in foreclosure-wracked Alameda County, Calif., says the number of referrals it made to people seeking assistance for the first time reached 325 in January, 25% above last year’s average. Meanwhile, the food bank received 28% less food that month from the USDA.

USDA officials say they recognize the impact of fewer surplus commodities. “We’re of course doing all that we can to help food banks fill their stocks,” says Kate Houston, deputy undersecretary for Food, Nutrition and Consumer Services at the USDA. Since July, the agency has swapped $93 million worth of raw commodities, such as wheat and cotton, with food manufacturers for off-the-shelf items sent to food banks.

When his family ran out of food last week, Daniel Wheelus went to Prodisee Pantry, in Spanish Fort, Ala., for the first time. He received a full shopping cart, including a ham, that he said would last a week for himself, his wife and three children, ages 16, 12 and 10.

“They even gave my boy some clothes for school,” he said. “They really, really helped.”

Mr. Wheelus, 39 years old, earns $13.60 an hour working in an oil field 45 miles from his home. But it costs him $30 a day to fill up the Dodge Dakota pickup he drives to work. His utility bills have doubled to $400 a month from last year, he says. He says he lost his house in October after missing mortgage payments following knee surgery and now owes back taxes.

Stepping In to Help

A number of corporations have stepped in to help food banks. Wal-Mart Stores Inc., already a large food donor, delivered a tractor trailer of food to a food bank in each state in December. Yet in many cases, food banks say they are forced to buy from brokers.

Last week, David Reaney, executive director of Bay Area Food Bank in Theodore, Ala., which serves parts of Mississippi, Alabama and Florida, fielded a call from a broker in Ohio trying to sell 30,000 cases of vegetarian soup. Mr. Reaney says he immediately passed the caller on to an operations manager. “We’ll listen to anybody,” he says. “We’re just trying to get the lowest-cost available food — as long as it’s healthy — to make it available to the agencies.”

The East End Cooperative Ministry in Pittsburgh is relying more on daily deliveries from a nearby Whole Foods store, as weekly deliveries from an area food bank have gotten smaller. The ministry group prepares meals in a church basement.

David Hereth, head cook at the soup kitchen, might get kumquats, pomegranates and artichokes, along with more common produce. One day, he received a yellow fruit he had never seen before. After researching the fruit, called a Buddha’s Hand, he passed it out to soup-kitchen patrons, along with staples like peanut butter and pasta. He suggested they use the lemonlike fruit as a flavoring for cakes and other foods.

Sloppy Joes

Mr. Hereth never knows what ingredients he will get each day. On a recent day, he prepared sloppy Joes made from ground beef donated by a nearby congregation, onions and peppers from Whole Foods, government ketchup from the food bank and buns from a Giant Eagle Inc. supermarket. He also served minestrone soup from a local Olive Garden restaurant, along with donated apple pie and tangerines.

About 100 people showed up for lunch, including Stacye Williams, 43, who recently lost her job as a hotel housekeeper. She appreciated the contribution from Whole Foods. “It’s organic, it’s better for us,” she said.

Others have been hit by housing woes. Michelle Brunetti-Williford never thought her middle-class family would need the help of the Prodisee Pantry. But the family’s economic stability slipped when the housing crisis made it impossible to sell their home — even after dropping the price by $100,000 — so they could move into something more affordable. Rising gas and food prices began to sap their income, she says.

“I’ve always been fortunate enough that we always had a beautiful home and a nice car,” she says. “Now this economy is stripping away even the small things.” She says she and her husband couldn’t afford a $32 school field trip for one of their two young daughters.

Deann Servos, head of Prodisee Pantry, says the organization is seeing more middle-class clients. “They may be upside down on their mortgage and really one or two paychecks away from poverty,” she says. “Just to keep things normal, they need food.”

To help make up for the drop in government-supplied food, Prodisee is counting on local food drives. In January, an elementary school collected 2,000 cans of food. Earlier this month, a women’s group collected 150 cans.

Write to Kris Maher at kris.maher@wsj.com3

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