A federal report finds American farmers are making significantly less money from their products in recent years based on their share of every dollar we spend at the grocery store. Dick Gallagher, chairman of the Iowa Corn Promotion Board, says the results of the U.S.D.A. report are discouraging and surprising.
“It shows that between 11 and 12 cents of the consumer dollar goes to the actual farmer for the product that he produces,” Gallagher says. “For our corn, that means we’re only getting 11 to 12 cents out of every dollar that the consumer spends. That’s different from what it has been before. It’s been much higher than that. It’s been anywhere from 15 to 18 to 19 cents before.”
Gallagher, who farms in Washington, Iowa, says farmers realize the raw products they bring to market, from grains to livestock, need value added to them and the report details those additions. “It mentions food processing, packaging, transportation, retail, food service, energy and finance as all things that take up the other 88 cents out of that dollar,” Gallagher says.
“We know there has to be an increase. We just think the times we get blamed for too much of the increase when, as you can obviously see by these figures, it’s not the producers’ fault.” To make farming financially practical, he says Iowa growers sometimes have to diversify and pursue niche crops, like setting aside a portion of farmland to grow grapes for wine making.
“Some years we make things work a lot better than others,” Gallagher says. “Some years are more profitable than others. Some farmers are going into specialty products such as organics, such as different things away from corn and soybeans, even grapes like you mentioned. It’s a combination of everything, I guess, as a farmer, we’re just eternally optimistic and we just keep movin’ on.”
The latest U.S.D.A. report called, “A Revised and Expanded Food Dollar Series – A Better Understanding of Our Food Costs,” was based on prices paid in 2010 and found just 11.6 cents of every dollar spent on food makes it back to the farmer. The previous report, from 2008, pegged the return at 19-cents on the dollar.
See the report here : www.ers.usda.gov/data/fooddollar