Farmers Continue To Get Less Of Every Food Dollar Spent

New estimates from the Department of Agriculture indicate the farmer’s share of the food dollar keeps shrinking.  Faith Parum, economist with the American Farm Bureau Federation, noted that the number varies slightly by commodity.

“The farmers receive less than six cents of the industry dollar," Parum said.  "2.5 cents of that is crop farmers, and 3.3 of that is livestock producers. So, what that means is, after accounting for production expenses, every dollar that American spends on food, 5.8 cents is going back to the farmer.”

The USDA, she said, uses data from the Bureau of Economic Analysis to come up with the report numbers, considering a variety of factors.

“How much of that dollar is put in each commodity," Parum said.  "So, you can imagine something like eggs, where there's minimal processing and minimal labor involved, might have a higher share of the food dollar. Then we think about something like snack food that has obviously gone through a lot of processing, labor, there's a lot of marketing involved, and so the farmer's share is less, in that case.”

Parum stressed the Food Dollar Report shows that even when grocery store prices go up, farmers are still price takers, not price makers.

“We'll continue to see headwinds in the farm economy despite higher grocery store prices or despite inflation, because the farmer's share of that is so small, and that's because the majority of that money is going to that further processing, food services, storage, marketing, and not directly back to the farm gate,” Parum said.

Click Here for the USDA's Food Dollar report. 

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