The Real Cost of Food:
Farmers provide educational treat for Maryland State Fairgoers
(TIMONIUM, MARYLAND) - Get ready to scream – with excitement that is – over a 10-cent ice cream cone at the Maryland State Fair’s Dairy Bar, open August 22 through September 1, 2008, outside the fair’s Cow Palace. Sponsored by the Maryland Soybean Board, the Maryland Grain Producers Association, the Maryland Farm Bureau Young Farmers and the Maryland Dairy Princess Association, the discounted ice cream cone illustrates to fairgoers the portion of their retail grocery dollar that actually reaches the farmer’s pocket.
“Farmers, on average, receive only about 19 cents of every dollar spent at the grocery store,” explains MSB Chairman Roger Schmick, a soybean farmer from Preston, Md. “That amount has actually decreased over the last 50 years, however, farm expenses have intensified right along with our rural and urban neighbors’ expenditures.”
In the instance of the fair’s $4.00 ice cream cone treat – dairy farmers would receive 9 cents for the amount of milk required to churn the generous 8-ounce portion heaped on the cone at the Dairy Bar. As for the cone, less than 1 cent would cover the cost of all farm ingredients including wheat, sugar, oat fiber and soybean oil.
The difference arises because most food undergoes processing that adds cost onto the consumer’s portion of the retail price. In the case of a $3.19 loaf of bread, the wheat farmer receives about 18 cents for the raw product harvested from his fields. Dairy farmers fare a trifle bit better with 46 cents from every $3.80 gallon of milk reaching their accounting ledger.
“After enjoying this cool delight at the State Fair, we are hopeful consumers will have a stronger appreciation for the fact that farm commodity prices have little effect on retail prices,” says Jamie Jamison a corn and grain producer from Montgomery County. “In the instance of corn, overall retail food prices increase less than 1 percent per year above the normal rate of food price inflation when corn prices rise by 50 percent. That is not significant at all.”
According to the American Farm Bureau, the rising cost of energy is the main fuel to the fire of rising retail food prices, accounting for 44 percent of the consumer’s food dollar. Other factors include processing, advertising and distribution of goods.
“Food is still a bargain,” reaffirms Laura Ruhlman, central and western field representative for Maryland Farm Bureau. “In the United States, consumers spend only 10 percent of their income on food, which is significantly less than people in any other country around the globe. Americans also enjoy the safest and most abundant food supply in the world.”
In France and Italy, consumers spend 14.9 percent of their disposable income on food – still a bargain compared to Japan (26 percent), Russia (28.5 percent) and Indonesia (55.1 percent).
Fairgoers who visit the MGPA’s and Maryland Department of Agriculture’s “Go Green” labeled booths in the Farm and Garden Building, and the Maryland Dairy Princess booth, located in the Cow Palace near the Birthing Center, can win one of the 500 coveted 10-cent ice cream cone tickets during the weekends at the fair by answering a trivia question.