Food still a bargain

April 07, 2008 09:56 am

— To the editor:
A news article in the Iowegian on Friday, March 21, concerning the higher cost of grocery bills was very misleading, as higher grocery prices were blamed entirely on increased grain prices. It is a fact, farmer’s grain prices have increased some in recent months but factual information from the Iowa Farm Bureau, Iowa Corn Growers Association, North Dakota Wheat Commission and the United States Department of Agriculture must be taken into account.
Statistics show out of every dollar American people spend for food at the grocery store, only 19 cents goes to the farmer for his input costs and 81 cents goes for other costs including 38 cents for labor and 24 cents for processing, packaging, transportation and advertising. Hopefully we can better understand that grain prices have such a minimal effect on grocery store prices. In reality, only about a nickel’s worth of corn is in a $4.00 box of corn flakes, 20 cents worth of wheat in a loaf of bread and 20 to 30 cents worth of durum wheat in a pound box of pasta, even at today’s higher wheat prices.
Most of the retail price of a loaf of bread or a box of pasta is attributable to non-farm costs, including transportation, higher priced petroleum and soaring international demand. Those costs play a much greater role in higher grocery bills than the price of grain. Those who say that farmer’s grain prices are the main reason for increased grocery bills are indeed misleading as grain prices have such a small part of the final retail price.
It should be noted, American’s will spend less than 10 cents out of every $1.00 earned this year to feed their families, thanks to the efficiency of today’s farmers. According to statistics from the USDA, the average working American had to work only until February 6th to cover this year’s food supply and must work 52 days to pay for health care, 62 days to pay for housing and 77 days to pay federal income taxes. We should really be thankful for the abundant food supply in our country.

Lawrence Powell
Udell