What would you say if your child asked you, “What do farmers do?” A long time ago, the answer, “Farmers produce our food” would have been reasonably acceptable.
Now, however, you had better hedge and say, “Farmers produce the raw products from which food is made.”
In the early 1950s, the farmers’ share of the food dollar averaged 45 cents. During the 1960s and ’70s, this share slowly fell until it reached 37 cents in 1980. By the 1990s it dropped to 30 cents, and in 1999 it hit a record low of 21 cents.
To put it in a different perspective, for every dollar the consumer spends for food, marketing and processing activities take about 80 cents, while the farmer receives the remaining 20 cents for the raw product.
In 1999, the consumer spent 25 percent more for a shopping basket of food than in 1990. For that basket, the farm value fell 13 percent, while the farm-retail price spread increased 41 percent.
Food isn’t the same.
In order to make some sense out of these changes, we must remember that we don’t buy the same food as we did 50 or even 10 years ago. Look at the produce counter with its year-round availability of a much great selection of perishables.
The meat counter, too, has a greater selection of cuts and packaging. You can buy full dinners in the frozen food section, as well as a wide range of other products that are ready to pop in the These changes mean that new, improved transportation and storage methods are necessary.
More processing. More cleaning, processing and cooking are now done in the food-marketing channel before the food products are made available in the grocery stores.
All these activities represent added work that is being done to the farm-produced raw material before consumers in the grocery store or fast food outlets are ready to call it “food.”
This situation is illustrated in the following table, which shows the farmers’ share of the retail food dollar spent for various food products in 1999.
Food Product Farmers’ Share
Choice beef 49 percent
Milk, (1/2 gallon) 39 percent
Potatoes (10 pounds) 19 percent
Grapefruit (1 pound) 18 percent
Frozen corn (1 pound) 13 percent
Canned corn 24 percent
Wheat flour (5 pounds) 19 percent
Potato chips 14 percent
Frozen French fries 10 percent
Bread 04 percent
Compare the farmers’ share of the retail dollar spent for beef and milk with that spent for potato chips and bread. A close look at the table simply adds to the previous discussion.
Transportation problems, perishability and additional processing all mean a smaller share of the food dollar for the farmers’ raw products.
One of our great blessings as a nation comes from our ability to produce the raw foods that we need. We depend on foreign imports for only a few special products, such as bananas and coffee.
Our agricultural production is geographically spread so that we rarely have a complete crop failure. Our supply stability is further enhanced by good transportation and storage systems.
When, as a consumer, were you unable to find what you wanted at your neighborhood supermarket?
It is true that much has to be done to farm-produced raw products before they become available as products that consumers in New York or Chicago will buy.
In 1999, the food and fiber industry employed nearly 25 million people-about one-fifth of American workers.
Back to your reply to your child’s question, yes, our farmers only produce the raw products that a widely diverse group of truckers, processors and retailers turn into the food that we eat.
However, it is quite in order to emphasize that without such a good system producing basic supplies, we would all go hungry.
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