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Friday, December 15, 2017
 As Farm Incomes Drop, Grocery Deals Rise  

By Marisol Bello

Consumers are reaping some benefits as farmers take their biggest hit in 35 years: lower food prices at the supermarket.

The U.S. Department of Agriculture forecasts farm income of $49.1 billion in 2009 when adjusted for inflation. That would be a 39% drop from 2008, a record year when U.S. farmers earned $80.4 billion after expenses.

It would also be the worst annual percentage drop since 1983. In dollars, it would be the worst since 1974, adjusted for inflation.

Consumers are benefiting a little from farmers' troubles, says Richard Volpe, a researcher in the Department of Agricultural and Resource Economics at the University of California-Davis. Supermarket prices on pork and dairy products are down, he says, but nowhere near as much as the drop in prices farmers are getting for their products.

Volpe says competition among supermarkets battling for consumers in the recession has more to do with the falling food prices.

The average retail price of a gallon of milk was $2.98 in August, compared with $3.89 in August last year, according to the Bureau of Labor Statistics. Meanwhile, dairy farmers saw the average price they got for every 100 pounds of milk drop to $11.80 in August from $18.40 a year earlier, according to the USDA.

The price drop has hit every sector of farming, but hog and dairy farmers have seen the sharpest declines. Both had benefited from exports to emerging markets abroad and were hurt by the global recession, says Mitch Morehart, an agricultural economist with the USDA. Meanwhile, he says, expenses remained high.

Farmers are laying off workers, refinancing properties and delaying repairs and equipment purchases, says Ralph McNall, a Vermont dairy farmer for 40 years who is president of the St. Albans Cooperative Creamery.

Dairy co-ops in Vermont, Massachusetts and New Hampshire have started a fundraising campaign to help dairy farmers.

Source: USA TODAY

http://www.usatoday.com/money/industries/food/2009-09-21-farmers_N.htm

 


Posted on Tuesday, September 22, 2009 (Archive on Tuesday, September 29, 2009)
Posted by bsutton@adpi.org  Contributed by bsutton@adpi.org
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