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Farm Expenses Up,
Yet Share of Food Dollar Unchanged
It seems like a magic trick. The cost of farming jumps up, but the percentage of the grocery dollar that goes to farmers stays the same. But there’s no slight of hand here. This new discovery simply shows how there is so much more that impacts the price of food than what happens on the farm.
USDA’s Economic Research Services forecast the price of farming in 2008 is 8.6% higher than in 2007 and 33% higher than in 2004. But over these same years, the farmer’s share of the grocery dollar remains the same, 19¢ for every $1.
So why are farmers' prices going up?
Just like you, farmers are impacted by the weak dollar, which helps increase the costs of buying feed, and the outragous price of oil, which impacts everything from fertilizer to electric bills. This is how these increased farm exspenses break down:
| 16.1% | Purchases Feed |
|---|---|
| 15.1% | Seed, Fertilizer & Crop-Protecting Chemicals |
| 10.1% | Capital Upkeep and Replacement |
| 9.8% | Farm Labor |
| 9.2% | Interest and Property Taxes |
| 6.5% | Fuel and Electricity |
| 6.4% | Purchased Livestock |
| 5.4% | Farm Services |
| 5.3% | Repairs and Maintaince |
| 4.3% | Rent |
| 11.8% | Miscellaneous |
It's no surprise, but the price of doing all business has jumped recently. Food companies, truckers, and packagers are all facing challenging times. That's why the cost of the other 81% of the food bill has increased too.
So what can be done?
There are no easy fixes, but every day, agriculture is developing and improving new ways to generate energy, cut labor costs, and find fuel alternatives.