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Decline in Grocery Food Prices Stretches to Farmers' Profits
Farmers lose money as food prices decline
Prices in the grocery store are down by 10 percent from last year, the Iowa Farm Bureau reports.
So are farmers' profits.
The Farm Bureau's survey of food prices shows the fourth consecutive quarterly decline from 2008, when corn and soybean prices hit record levels and food processing companies and supermarket chains were warning of spikes in food prices.
Instead, commodity prices have come down. Prices for corn, soybeans and livestock are slightly more than half of what they were 12 months ago.
Not surprisingly, it's the farmers who now feel the squeeze.
"While the decline in global demand has helped bring prices down for shoppers, a combination of decreased demand and other factors has made things more difficult for farmers, particularly those who raise livestock," said Dave Miller, director of research and commodity services for the Iowa Farm Bureau.
"Despite the tremendous efficiency of the American farmer, the profit margins in farming are narrow, and there is a relentless cost-price squeeze. Narrow margins and high efficiency are reflected in the farmer's small share of the food dollar, 19 cents.
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