Dayton Chronicle - Your Hometown News Source

Food prices have gone up in recent months, but farmers are not getting paid more.

While farmers and ranchers are in the business of producing food for consumers, it is a long way from the farm gate to a dinner plate and the in-between is where costs start to pile into the cost equation.

So, before anyone who read the recent story outlining the rise in food costs seen in Seattle equates that to farmers and ranchers making a profit, let’s take a look at farm prices for some of those original commodities and break down what the farmer or rancher takes away from the grocery store price.

With warm weather comes grilling. The slowdown of meatpackers throughout the United States in early spring put the meat supply chain into serious trouble. Despite packers being closed, animals were still ready for processing, causing a backlog of finished animals ready to be harvested with nowhere to go.

So, while Seattle consumers may have observed the cost of their meat bill go up approximately 10 percent since this time last year, ranchers are still taking home a fraction of that cost. Top Sirloin Steak averages $9.99/lb., the rancher’s portion of that cost is $1.75/lb. In the last year, live cattle prices have declined 2.65 percent.

Dairy products have a similar story. Dairy producers struggled earlier this year with falling milk prices and lack of product demand as schools and restaurants were forced to close. Demand has rebounded as some businesses have been able to reopen but not to pre-COVID levels.

Dairy products have seen a 12.9 percent year-over-year increase at the grocery store while farmers are collecting just $1.56 from every $3.59 gallon of milk sold. Milk prices have seen some wild fluctuations during the last several years that have made it difficult to be a dairy producer. In September 2014, milk prices were over $25 per hundredweight, and in May of this year, they were at $13.60.

Estimates vary regarding the break-even point for operating a dairy with the low-end starting at $14.28 per hundredweight and the upper end at $22.19 per hundredweight.

Fruit and vegetables have increased by a combined 3 percent year-over-year since last June. However, the farmer’s share of a $2.49 pound of apples is $0.59; $0.48 a pound for carrots; $0.24 a pound for potatoes; $0.25 a pound for lettuce; and $0.57 a pound for tomatoes.

The disparity in price has a great deal to do with the various steps from one place to another. A farmer or rancher “manufactures” an item – in this case food – and sells it at a wholesale price. From there is it shipped, stored, transformed, and moved many times over before reaching its grocery store destination and, ultimately, a consumer’s home.

Each of those steps adds cost to the item but it is a cost that does not trickle back to the farmer or rancher, it is funding that will go to the packaged shipper or the packaged seller instead.

Approximately 60 percent of farms and ranches in the United States operate in what the U.S. Department of Agriculture classifies as the “critical zone” of income, meaning they have a profit margin of 10 percent or less. In these unprecedented times, farms and ranches need to do a better job of explaining why the price in the store is not necessarily reflective of the income they receive.

If trips to the grocery store are getting you down, consider buying your meat and produce direct from the source. Washington state is brimming with local options for almost anything on a grocery list. With more than 300 commodities available in our great state, it is hard to miss something on a foodie wish list.