I knew when the price of gas began to rise the media outlets would begin finger pointing at agriculture for the increase costs of groceries in the supermarket.
After a great week of Celebrating National Ag Day and crazy schedule, I finally got to enjoy a quiet day on the farm listening to the Today Show over morning coffee. My ears perked when Janice Lieberman began to discuss the rise of food costs. As she carefully pointed out that the USDA predicts the price of food will increase 3 to 4 percent this year, I muttered under breath and who is to blame? You Betcha “The American Farmer”
So with full attention I listen to Lieberman’s piece about increase food costs and tips to consumers. After all I am not just a farmer but a mom and consumer. At the end as the reporters discussed the rise of food costs injecting personal perspectives, chills rose up my spine when I heard Janice Liberman utter these words “Corn is the Culprit”.
So apparently, we need a refresher course on the Actual Costs of Food from Field to Table:
Did you know that farmers and ranchers receive only 20 cents of every food dollar that consumers spend on food at home and away from home?
According to USDA, off farm costs include marketing, processing, wholesaling, distribution and retailing account for 80 cents of every food dollar spent in the United States.
Click to download this Food Cost Breakdown provided by National Farmers Union
Futhermore, the United States Department of Agriculture points out these facts about Foods Costs:
- Higher corn prices increase animal feed and ingredient costs for farmers and food manufacturers, but pass through to retail prices at a rate less than 10 percent of the corn price change.
- Corn as an ingredient in food items make up less than a third of retail food spending, overall retail food prices would rise less than 1 percentage point per year above the normal rate of food price inflation when corn prices increase by 50 percent.
So what is behind the rise in food costs?
The price of Crude oil, the price of the doing business for the packaging-manufacturing-distributor-retail
I think the best answer to Consumers’ Question on Food Costs was given on the Ohio Farm Bureau Website:
If food prices rise, do farmers get more money?
The short answer is no. Commodity prices rise and fall every day, but farmers have nothing to do with setting food prices unless they are selling directly to consumers at their own farm, farmers market or as part of a group farmers market. On average, more than 80 percent of the cost of food at the grocery store is attributed to marketing and transportation costs, that of which a farmer gets nothing. (http://www.virginiagrains.com/Food%20and%20Fuel.htm)
Reference:
http://www.ers.usda.gov/AmberWaves/February08/Features/CornPrices.htm
Farmer’s share derived from USDA, NASS “Agricultural Prices,” 2011. Retail based on Safeway (SE) brand except where noted. http://www.nfu.org/media-galleries/document-library/nfu-literature/farmers-share/
http://ofbf.org/education-and-reference/faq/
