Some consumers are under the impression that farmers make a lot of money based on the prices they see at the grocery store.
According to the U.S. Department of Agriculture (USDA), for every dollar spent on food, farmers and ranchers receive roughly 17.4 cents. The remaining 82.6 cents for off-farm costs include marketing, processing, wholesaling, distribution, and retailing.
The food dollar series for USDA’s Economic Research Service (ERS) measures annual spending by consumers on domestically produced food.
Compared to retail prices on most of the products listed, farmers make pennies compared to the price consumers pay at the grocery store. For instance, for an 18-oz. box of cereal that costs $4.79, a farmer will make only 5 cents.
For more examples between the retail price of food and what farmers make, watch the video above.