Farmer’s share of the Food Dollar

March 2, 2012 at 12:20 · Filed under farm, food systems, sustainable

If you been in farming for a long time or exposed to the farm life you are aware of the economic struggle that the farmer encounters daily. In fact, the economics of the food dollar don&#39t look good for farming. From 1910 to 1990 the percentage of the food dollar has been consistently declining.
Gliessman, Engles, Krieger, 1998

There are two factors affecting this percentage, the marketing and the production costs of farming. Farmers have two ways then, to get back more of the food dollar, reducing production costs or taking back marketing/selling dollars.

Production cost have increased with the need to buy more equipment, purchase more land and create a farm that can operate with a large scale that the economics allow for a reasonable salary. There is a lot of technology to keep up with and technology costs money. Using co-ops and neighborhood collaborations can reduce the investment costs.

High oil, nitrogen, and energy prices are here to stay. Farmers can start to look  at reducing energy inputs based in oil.  The sun is a free source of energy for you whole farm.  Assessing your energy uses and deciding where you can cut could be very beneficial.  If you have a high electricity bill, you can think about switching to more passive natural systems, for ventilation, heating, or lighting.  You can look at where energy potential is being wasted, for example cooling milk, where does that heat go? It could go towards heating your house, or perhaps contribute to heating a pig barn?

The other aspect is the marketing and selling food to the consumers.  Big grocery stores and processing companies have taken a major portion of the food dollar.  These companies govern the price of food for consumers and the price of food that the farmer should get. There are two major industry concerns here, is the consumer willing to pay more for food? and does the local food market allow farmers to recapture some of their food dollar share? Most people are not willing to pay more for food if they don’t have to, we are all cheap (not just the dutch)! So how can we skip the middlemen grocery stores? On-farm markets and in-town farmers markets, or even CSA, and other food share programs which deliver the food directly to the customer and the profits directly to your pocket!

Gaining back some of your food dollar will require some creative and perhaps even out-of-the-box thinking.  It might even get you criticized, but just image the white area in the chart representing the food dollar increasing and I think you will find its worth it!

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