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As Food Prices
Rise, the Farmer's Share Drops
Source:
The Hand That Feeds U.S.
Posted on November 12, 2010
Farmers and consumers have a lot
in common: neither benefit from higher grocery prices.
The National Farmers Union recently released its
Farmer's Share (of the grocery tab) data for the month
of September, and once again, farmers came out on the
losing end-even with higher than normal
commodity prices.
|
Product |
Retail Price |
Farmer's
Share |
|
Multi-Purpose
Flour, 5 lbs |
$2.59 |
$0.63 |
|
Bread (1 lb.
loaf) |
$1.99 |
$0.12 |
|
Cereal (18
oz.) |
$4.19 |
$0.06 |
|
Bacon (1 lb.) |
$4.39 |
$0.61 |
|
Soda (2 liter
cola) |
$1.59 |
$0.07 |
|
Cheddar
Cheese (1 lb.) |
$3.29 |
$1.62 |
|
Lettuce
(head, 2 lbs.) |
$2.19 |
$0.36 |
|
Fresh Carrots
(3 lbs.) |
$2.99 |
$0.81 |
|
Milk (1 gal.
fat free) |
$3.79 |
$1.38 |
*Retail prices: based on store brand except where noted
from Safeway, Washington, D.C., September 29, 2010.
In fact, the farmer's
share of the retail food dollar has been on the decline
for more than 60 years. In 1950, farmers received more
than 40 cents for every food dollar that consumers spent
in the grocery store. Today, they receive a paltry 19
cents.
And that 19 cents isn't even pure
profit—instead it's put towards the
many expenses of running a farm,
such as seeds, machinery, fuel, and fertilizer. The
farmers simply have to hope and pray that their yields
and market prices are high enough to cover the costs. If
not, they hope for a better year next year in order to
pay off the loss-or worse, hang it up.
So where's the
remaining 81 cents going that the farmer isn't getting?
It pays for marketing, processing, wholesaling,
distribution, and retailing, factors that are out of the
farmer's hands once he sells his product.
A few years ago, when
food prices peaked at unusually high levels, some blamed
the farmer when the actual culprit was high oil prices
and food company profits. Rising oil prices translate
into higher transportation, processing, packing, and
distribution costs, which add to the final price
consumers see but not the money that goes into the
farmer's pocket.
And, while our
grocery store bills may rise and fall depending on a
number of external factors, the farmer's share generally
remains unaffected.
The Farmer's Share
data is particularly troubling given the face of
American agriculture today: almost half of all American
farmers today are older than 55, and a mere eight
percent of farmers are younger than 35. The costs of
running a farm continue to rise while profits decrease,
and many family farms rely on off-farm income to stay in
business. It's no wonder that many in younger
generations are hesitant to devote their lives to such a
risky business.
Still, farmers and
ranchers are, by nature, big risk takers and hopeful
people. There isn't a lot of profit in farming and
ranching today, but there's plenty of family pride.
Note:
This
article was originally published in The Hand That Feed
U.S. November 2010, and is published on
ExperienceClovis.com with permission. All rights
reserved.
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