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The Farmer’s Share Drops as Food Prices Rise

May 13, 2011

ST. PAUL, Minn. - It's costing more and more to fill that grocery bag these days, but that doesn't mean a windfall for local farmers.

More than 80 percent of the retail food dollar goes to people other than the growers and producers, says Doug Peterson, president of the Minnesota Farmers Union.

"It's the middle person, those people that buy from the farmer and sell to the consumer, the processors in between."

The farmer's share of the retail food dollar, once at about 20 cents, has fallen to less than 16 cents. Peterson says that drop not only affects producers but also creates a ripple effect in their rural communities because there are fewer farm dollars to spend.

Food prices are on the rise not because farmers are taking a greater share, Peterson says, but because of higher energy costs and limited outlets for products.

"The concentration in agriculture in the hands of very few. Competition. Fair trade issues. Those are all important in the cost of food to the consumer."

The National Farmers Union calculated the farmer's share of food dollars. One example: When a shopper pays $5.50 for a pound of bacon, the hog producer receives less than $1. A chart breaking down the farmer's share of several grocery-store basics can be found at www.nfu.org.

John Michaelson, Public News Service - MN