Published in Food/Agribusiness

Report highlights disparity between food prices, farmers’ bottom lines

BY Friday, November 29, 2019 10:22am

For every dollar that Americans spent on yesterday’s Thanksgiving dinner meals, growers and ranchers received just 12.1 cents — even less than their average slice of the pie throughout the year.

That’s according to the annual Thanksgiving Farmer’s Share Report from Washington, D.C.-based National Farmers Union (NFU). The findings compare the retail food price of traditional holiday dinner items to the amount farmers receive for each item they grow or raise.

The lower rates combined with ongoing geopolitical disputes, extreme weather patterns and uncertainty about market facilitation program payments are leaving many farmers struggling this holiday season, according to Roger Johnson, president of the NFU.

“While consumer holiday food costs continue to decline, incomes for American farm and ranch families are have dropped dramatically over the past seven years,” Johnson said in a statement. “We’re in the midst of the worst farm economic downturn in generations.” 

This year, wheat farmers averaged $0.03 for 12 dinner rolls that retail for $2.69. Dairy producers received $1.66 from a $4.59 gallon of milk. Turkey growers, who raised the staple Thanksgiving dish, received $0.06 per pound. 

“Farmers and ranchers play the most valuable role in actually producing the food that is served at holiday dinners, yet they make just pennies on the dollar for their products,” Johnson said. “The farmer’s share of the retail food dollar continues its gradual decline from year-to-year as food companies take in record profits and family farmers sell their farms.” 

However, the report also highlights a “robust and important” U.S. food system, according to Tim Boring, vice president of the Michigan Agri-Business Association

On average, farmers receive 14.6 cents of every food dollar consumers spend throughout the year, while more than 85 percent of food costs cover marketing, processing, wholesaling, distribution and retailing, according to the report.

“We have a remarkably cheap and safe food system today, and that is the result of a lot of robustness within the processing sector,” Boring told MiBiz. “There are a lot of hands that touch our food as it moves through the system and it makes sense then, when you step back a little bit and understand that there are an awful lot of different things that go into, in this case, what our Thanksgiving dinner ends up looking like.” 

While some Michigan farmers are struggling — particularly soybean growers— many farms are still profitable, said Boring, who also farms land in Stockbridge, Mich. 

“We’re producing commodities and it’s natural to have peaks and valleys within those systems,” he said. 

Michigan is the second most agriculturally diverse state in the U.S. and due to its robust turkey, wheat, fruit and vegetable industries, many of the foods that ended up on Thanksgiving plates came from the region, according to Boring. 

Consumers who are “rightly concerned” about the lower-than-average percentage of farmer profit that went into their holiday meal can “vote with their pocketbook” the next time they are at the grocer, Boring said.

“Michigan is a wonderfully diverse state,” he said. “There are a lot of products on the grocery shelf that directly contribute to the economy here in Michigan. All too often, we shop just based solely on price with our food, but for consumers that are interested in investing in Michigan agriculture, there is definitely some opportunity to do that.”

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