The Iowa Farm Bureau says its second quarter "market basket survey" found the cost of 16 food items fell by two-percent from the first quarter, and it’s the third straight quarter there’s been a decline. Farm Bureau president Craig Lang says the drop in prices shows those who pointed the finger at ethanol when prices rose were wrong.
Lang says corn is now selling for less than $3.00 a bushel locally, as a year ago it was more than twice that price and people were concerned that the ethanol market was the driver in the cost of corn. He says we can now see that energy costs are the driver of food costs and not renewable energies.
Lang is a dairy farmer and says the lower corn prices have helped producers — but they are still struggling. He says the feed cost is less than 50% of the cost of production, so lower corn prices help, but he says soybean meal prices are still up, veterinary costs are up, and fuel costs are still above the 10-year average.
The recent acreage report showed more land than expected planted in corn, and that drove down the price. Lang says that was another blow to farmers. Lang says many farmers had fixed the cost of production for rental rates, land and machinery purchases based on $4.00 a bushel corn. "So I think we’re gonna have really a rough year for not only the corn growers, but also the livestock industry until we can somehow squeeze more of that consumer dollar back to the farm gate," Lang says.
Lang says lower food prices are good for consumers and help farmers as people can afford to buy. Lang says he’s "really concerned" the food prices don’t increase, as people will buy less and the world market have already fallen off for food — which impacts all farmers. The survey found that over the last year the retail price of eggs is down 26%, milk has fallen 22%, chicken has declined 19% and bacon is 11% lower.
Find out more about the second quarter marketbasket survey on the Iowa Farm Bureau’s website .