Farmers set record straight on food costs

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Next time someone jumps on farmers for getting rich while families get stuck buying $3.75 gallons of milk, tell them corn growers make about 16 cents (4 percent of the purchase price) for that gallon. Then tell them labor and energy costs higher up the production chain account for nearly 60 percent ($2.18) of that price. The rest comes from a combination of other costs, like marketing and stocking at the store, equipment depreciation and plastics at the plant, not to mention a skyrocketing international demand for food and energy as East Asian countries develop sophisticated free-market economies.

Then tell them input costs for farmers, in some instances, are growing as fast or faster than its trading price, which happens to be at a near record high of $5.07 per bushel, though adjusted for inflation, it's not as high as it was in the late 1970s.

The complex interplay of market forces on the price of home-grown commodities, and the relatively small take for the average farmer, is a picture the Lee County Farm Bureau tried to paint, as it served up 50-cent meals at its Farmer's Cost Breakfast on Saturday morning at the Loveland Building in Dixon.

"The value that comes back to the farmer isn't as much as people think it is," said Danelle DeSmith, manager of the Lee County Farm Bureau, after taking a break from serving up 9-cent glasses of milk and orange juice. "Farmers aren't price setters, they're price takers."

A farmer's income is about 50 cents for a meal that would cost between $3 and $5 at the average diner - two pancakes, two sausage patties, orange juice and milk, complete with butter and syrup.

If they're not blaming the farmers for a $3.75 gallon of milk, shoppers grouse that ethanol production is diverting too much corn away from the food supply.

Again, it's not so cut and dried, says Farm Bureau President Jim Scheaffer, who credits ethanol producers with "doing wonders for the rural community."

Literally tons of energy gets returned to the food supply after ethanol plants distill corn into alcohol.

About 40 percent of every kernel of corn ends up in what the agricultural industry calls dried distillers grain (or DDGs as they're commonly called).

DDGs are a byproduct moonshine distillers have known about for centuries, and now they're something the United States exports by the freight-train load, because livestock farmers in most international markets use the yellowish pulp for cattle feed.

"They can't ship it out of the country fast enough," Scheaffer said, noting that during a recent visit to Vietnam, agriculture experts there said the country is buying more DDGs because of a push to round out its domestic food supply.

The same is true on a much more vast scale in China, Scheaffer noted.

Farming "is really an international market now, there's no way around it," DeSmith said. "I think a lot of the time people just don't realize that."

Reach Sam Smith at (815) 625-3600, (815) 284-2222 or (800) 798-4085, ext. 525.