Sunday, June 24, 2007

Don't Blame Farmers For High Food Prices

Bill Bruins, the President of the Wisconsin Farm Bureau, has published an essay regarding recent food price increases from a farm perspective that is worth reading. You won't, of course, find this perspective in any major newspaper because it won't help sell papers with their normal Fear, Uncertainty and Doubt reporting!
By: Bill Bruins, Farm Bureau President - 06/22/2007

Recent increases in retail food prices have been blamed on the farmers, from the media to even some within the food marketing system. Can you imagine farmers, who are trying to keep their farms profitable and feed, and now fuel the world, are getting 'blamed' for higher prices?

Farmers are being blamed for higher corn prices from expanded production of ethanol and higher feed prices that are increasing the cost of producing milk and meat. It's important to keep the cost of food in the United States in perspective. Farmers should be looked congratulated for being able to respond to the demands of consumers for both food and fuel.

Many factors are influencing the increases in food prices, mainly higher petroleum prices that add the cost to food through trucking and packaging. Strong consumer demand in the U.S. and around the world for dairy products is keeping markets tight. Drought in the Southeast is affecting vegetable, fruit and grain prices and supplies. And yes, higher grain prices are having an affect on egg and poultry production and retail prices.

Keep in mind American's spend about 10 percent of their disposable income on food, far less than any other population in the world. Also remember that the farmer only receives 19 cents out of every food dollar that is spent, so the bulk of the cost of food comes after the materials leave the farm.

When you compare the price of other basic commodities and food products from 1979 to 2007, corn prices have barely moved. A postage stamp cost 15 cents in 1979; now it's 42 cents, a jump of 173 percent. Gasoline used to cost 86 cents a gallon. Now at an average of $3.02 a gallon, it's up 261 percent. The minimum wage, which determines a lot of farm labor costs, was $1.80 an hour then. It's $7.25 an hour now. Yet the average price of corn was $3 a bushel in 1979, and at $3.50 a bushel it's gone up only 17 percent in 28 years.

One farmer can feed more than 140 people, about 20 people more than 20 years ago through new technology and improvements in production. American agriculture has a tremendous capacity to produce food and fiber, and now fuel for our country and beyond.

When prices improve, farmers aren't out there buying BMWs. They are investing their income back into their farms to keep them profitable when times turn the other direction. And if slightly higher food prices in the store find its way to the farmer's pocket to pay for higher production costs, it's much deserved, and the way our free market system should work. The alternative is government programs, which the public, and farmers, don't like.

Wisconsin farmers need to see a return on the investments they've made into improving production and finding new uses for the livestock we raise and the crops we grow, including non-food uses for energy. They should not have to defend the prices they receive when the commodity markets work in their favor from meeting these demands of consumers. We can feed America, and we can continue to feed many parts of the world. We can also produce the materials for renewable energy, and do all of this at a price that remains affordable to consumers.
balanced food and fuel ethanol energy security biofuel
Source: Wisconsin Farm Bureau

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