By TIM THORNBERRY
Kentucky Correspondent JOHNSTON, Iowa — The USDA publication A Revised and Expanded Food Dollar Series – A Better Understanding of Our Food Costs has been released with a significant finding: The portion of a U.S. food dollar representing the farmer’s share is less than originally thought.
The report notes – by way of a graphic breaking down where every penny of each dollar goes – that only 11.6 cents of $1 spent on food in this country go to the people who raise that food. And while food prices have risen of late, the cause really has little to do with corn being used for ethanol, say corn proponents.
“Only a small percentage of our food dollars actually pays for the production of the raw commodity itself,” said Dick Gallagher, chair of the Iowa Corn Promotion Board (ICPB.) “I think it is easy to see that what you pay at the store has even less to do with the price of corn.”
In response to the USDA information, Matt Hartwig, communications director at the Renewable Fuels Assoc. (RFA), recently wrote on that organization’s blog, “No reasonable advocate for American ethanol will tell you that using corn to produce ethanol has no impact on food prices. But, to suggest that the driving factor behind the rise in food prices is our effort to develop a domestic renewable ethanol industry is disingenuous.
“An historic look at U.S. corn production and demand streams demonstrates that virtually every bushel of corn now turned into fuel and feed by U.S. ethanol producers comes from increases in productivity, not by taking supplies away from other uses like livestock feed.”
Geoff Cooper, RFA vice president of Research and Analysis, noted American farmers continue to produce more and more food and feed, yet are receiving less of each dollar spent at the retail level.
“Energy-intensive activities like food processing, transportation and packaging gobble up nearly three times the value farmers receive. And as oil prices continue to rise, an even larger share of every dollar spent on food is paying for the higher energy costs facing the entire supply chain,” he said.
Mindy Williamson, director of communications and public relations with the Iowa Corn Growers Assoc. and the ICPB, said the USDA report is a re-release from the original report put out in 2008, explaining where each dollar spent on food goes to in regards to the different sectors of the economy.
“What we’re most interested in is that the number from 2008, of 19 cents of the food dollar, is now only 11.6 cents that is actually farm-gate value,” she said.
What this tells the consumer is that actual farm costs for what they are buying at the grocery store is fewer pennies on the dollar. For the farmer it means they are producing goods more efficiently than ever. This is no small feat, considering input costs for farmers have risen over the last few years.
“We know that farmers are excellent at being stewards of the land and saving of resources and making sure they are doing things as efficiently as they can, but now that we have this graphic telling the U.S. consumer that U.S. farmers are doing all they can, I think it’s good for everyone,” she explained.
Williamson noted in this country, a family can expect to spend about 10 percent of their annual income on food. That figure can be as high as 80 percent in other countries.
Gallagher used the example of a box of cereal costing perhaps $3 in the grocery; according to the USDA information, only about 35 cents of that goes to the farm.
“That shows that food costs have increased most definitely, but it’s not necessarily because of the input of corn into food production,” he said. “We are doing our absolute best to produce all the corn that we can. We think we’re doing it and we think we’re able to provide food, fuel and fiber and still, at a reasonable cost.”
The USDA report also shows that more than half of each dollar goes to food processing and food services sectors. |
