When the cost of produce goes up at our local grocery store, it directly impacts our weekly finances, and we all want to know who is to blame. Is it the farmer? The grocer? The weather? It’s easier with other products, for example gas for our cars. We can blame the oil cartels or some faraway pipeline problem. Either way, we usually end having to find a way to make it work. We start to look for the best value for our dollar—start biking to work, clipping coupons, evaluating our food choices. At the end of the day, we want to make sure we are not the victims of greed. We certainly don’t want to make someone rich while they are making us suffer! Do the big oil companies really need more profit?
With produce it’s a different story. Usually when the price of produce goes up, crop failure due to weather conditions is to blame. The retail prices increase when the supply decreases. And the ones who take the greatest risk are the farmers. So they must also reap the greatest rewards? Actually, no. By the time the retail cost paid by the consumer is broken down into what it costs for each link in the chain from the farmers field to the grocers shelf, the farmer actually gets a very small percentage of the profit. Statistics from a National Farmers Union report from 2013, using data from the USDA Economic Research Service, shows that on average, growers get back only 15.8 cents of every food dollar spent in the United States—only about 15% of each dollar spent! Looking at the data closer, more than 80 cents of every food dollar (80% of the cost) goes to the transportation, distribution, marketing, processing, wholesaling, and retailing of our food. (more…)