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Lack of Competition and Increasing Food Prices Impact Rural South Dakota
Health Outcomes Suffer As A Result of Rising Food Costs, Especially in Small Towns Across South Dakota

In many smaller towns across South Dakota, residents have one grocery store to shop at. Due to internal politics and pressure on various City Councils to prevent competition in the marketplace, those unable to travel long distances to grocery shop are suffering both financially and health wise.

According to a recent University of Wisconsin Population Health Institute study, Lake County South Dakota ranks as the healthiest county in South Dakota. However, Lake County also has a 29% obesity rate compared to the least healthiest counties nation-wide at a 30% obesity rate. South Dakota in general has a 33% obesity rate, higher than the national average.

One reason for this, according to the study, is access to affordable and quality food. While Lake County is a popular summer destination for its many lakes, and has 60% access to physical activities, some of the smaller towns within Lake County have only one grocery store.

A study conducted by Oxford University, finds that price level for food products falls with city size.

"This article uses detailed barcode data on purchase transactions by households in 49 U.S. cities to calculate the first theoretically founded urban price index. In doing so, we overcome a large number of problems that have plagued spatial price index measurement. We identify two important sources of bias. Heterogeneity bias arises from comparing different goods in different locations, and variety bias arises from not correcting for the fact that some goods are unavailable in some locations. Eliminating heterogeneity bias causes 97% of the variance in the price level of food products across cities to disappear relative to a conventional index. Eliminating both biases reverses the common finding that prices tend to be higher in larger cities. Instead, we find that price level for food products falls with city size."

The Dakota Leader conducted a sample basket of the same items from The Madison, SD Sunshine Foods (the only grocery store in Lake County's city of Madison) against Wal-Mart in Sioux Falls, South Dakota (the nearest large city). The price variation for 21 items was 84.31 to a respective 77.88. While a $6.43 difference might not seem like a big deal for two meals, milk and some breakfast items, the largest cost disparity came in the form of fresh produce. For example, at the Madison Sunshine each apple is priced at .75 cents, as opposed to the Wal-Mart where apples are 2.50 per pound, or approximately .62 each. Similarly, we found that fresh dairy items like yogurt, milk and creamer were nearly double the cost at the small town grocery store.

Various factors are impacting food costs today, from fuel prices to supply chain interruptions. However, one of the largest impacts according to researchers, is competition. When a town only has one grocery store, items tend to be more expensive, limiting the ability of many to purchase fresh produce and opt for healthier items. Instead, people tend to buy more cost-effective, shelf-stable items and forgo the fresh produce, if its even available.

According to
data recently released by the Federal Reserve, “supply chains remain disrupted, in some cases to an even greater degree than earlier in the pandemic.”

Forbes recently reported that, "the Covid shutdown wiped out the advantages of just-in-time inventory management, so some companies are opting for “just-in-case” inventory, ordering further ahead than usual," according to a report on DigitalCommerce360.com, an ecommerce media platform.



This is causing fresh food items like produce, to become more expensive for consumers in general. However, in smaller towns where prices can differ drastically, it's becoming a health and equity issue according to Policy Matters. "Recent research has found that in the United States, limited access to healthy food is associated with a lower consumption of fruits and vegetables, and a higher probability of obesity and other dietary related health problems. Areas with limited food access and low average incomes are often referred to as food deserts."

The USDA defines a food desert by low-income and low access. The federal government is now creating grants to assist with grocery store start-ups, and even mobile food trucks.

As Medicaid Expansion comes to the November ballot, lawmakers are requesting more information on the costs of healthcare in South Dakota, and what is driving various metrics of health outcomes. Under
Universal Healthcare, the government could limit the amount of sugar obese, and diabetic people intake per month, or implement food bans in general. Policies such as this, could go a long ways towards helping to increase overall health outcomes, according to the CDC "Healthy People 2030" framework. However, the issue of equitable access to healthy foods, would still remain an issue to be solved.

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--Breeauna Sagdal- Editor At Large

Post Date: 2022-08-31 13:04:15Last Update: 2022-08-31 11:48:41


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