Farmers Receiving Less of Food Dollar

Farmers Receiving Less of Food Dollar

New analysis shows that processing, packaging and shipping are big part of increased food prices.

A recent analysis from USDA shows that American farmers and agribusinesses receive just 11.6 cents of every dollar spent on food in the United States. That is down from the nearly 20 cents USDA previously calculated, using a different method, and undercuts arguments that farm prices for commodities and feedstuffs like corn are driving higher retail food prices.

Geoff Cooper, Renewable Fuels Association Vice President of Research and Analysis, says American farmers continue to produce more and more food and feed, yet they are receiving less and less of each dollar spent at the retail level. Cooper notes that energy intensive activities like food processing, transportation, and packaging gobble up nearly three times the value farmers receive.

According to USDA, the second-largest contributor to food prices is the combination of food processing, packaging, and transportation, all of which are highly energy-intensive activities. According to RFA, this USDA analysis, as well as a review of recent speculative activity in commodity markets, once again proves that volatile energy prices and Wall Street speculation are the primary factors driving food prices higher.

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