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What do farmers get out of what we spend on food? Not much!
envirovore.com — On average, farmers and ranchers only receive 20 cents of every dollar that consumers spend on food.
SVOboy- 645 diggs
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- hwy61revisited, on 07/22/2008, -4/+13I thought it was only 5 cents...
- sneakeykop, on 07/22/2008, -11/+29
record industry = farming indistry- hwy61revisited, on 07/22/2008, -1/+4Agreed!
- picpak, on 07/23/2008, -0/+4Let's hope the grain distributors start suing people who've never even been on a farm.
- st0ney, on 07/23/2008, -0/+6Well not really, the distribution of fresh food is quite a bit more expensive then the costs that the record industry deal with.
We do need to find a way to lower costs. I've worked on a number of farms and farmers are seeing hard times and they only look like they are getting harder. Small time farmers are going out of business all the time. - heliox, on 07/23/2008, -0/+4That means if I grow my own veggies in the back yard or give them to a friend, the USDA is going to sue me?
- DyceFreak, on 07/23/2008, -1/+6I don't know, last I checked getting 20% on a mass produced product is actually quite good after the business markups and expenses are said and done.
- jthei, on 07/23/2008, -0/+7that's why I'm switching to all digital downloads, I'm trying to torrent a bushel of corn but I need more seeds.
/corniness
- MarkusGarvey, on 07/22/2008, -6/+56they forgot to mention the subsidies...
- noobifiggah, on 07/23/2008, -11/+7You forgot to mention the number of subsidies that are now non-existent or unhelpful thanks to Bush. He managed to cut a few of those several years back... but being an extremely small percentage of Americans, nothing was, or probably will be, done about it.
That never gets covered... or the effect of the rise in taxes, fuel, and chemical costs for farmers.
For anyone that hasn't spent much time around the farm business, the majority of us are not wealthy.- mboudro, on 07/23/2008, -0/+8Government subsidies are never good. Ever. No matter what the situation. It destroys the economics behind the free market.
And I've been around farming my entire life, small farmers at that... and trust me, they are never the ones receiving the subsidies anyway, it's always the farmers mass producing enough product to make the subsidies something significant.
- mboudro, on 07/23/2008, -0/+8Government subsidies are never good. Ever. No matter what the situation. It destroys the economics behind the free market.
- Halgy, on 07/23/2008, -2/+9And pretty much any farmers who are wealthy come from cooperate farms. The average family farm, even with subsidies, can barely survive.
- subterfuge, on 07/23/2008, -4/+3so go to school and stop ***** farming. it's going to be 99% robotic before you know it.
- skipdog172, on 07/23/2008, -0/+3well that certainly isnt the case in nebraska. you should see some of the houses that these family farms can afford....
- amightywind, on 07/23/2008, -3/+12The rise of the millionaire farmer is one of the great untold stories of the 2000's. It is a disgusting example of the unintended consequences permanent welfare state. It lowers all of our standards of living. If you got rid of Iowa as the first test in the Presidential race you could get rid of farm subsidies.
- Arkons24, on 07/23/2008, -3/+7Your comments are made of win sir.
- BoneheadFarker, on 07/23/2008, -3/+2@Arkons24
Have you actually read some of his comments? They aren't made of win at all...
- noobifiggah, on 07/23/2008, -11/+7You forgot to mention the number of subsidies that are now non-existent or unhelpful thanks to Bush. He managed to cut a few of those several years back... but being an extremely small percentage of Americans, nothing was, or probably will be, done about it.
- madrigaelic, on 07/22/2008, -2/+19@sneakeykop: except, like, you need food, and you don't need, say, plastic discs filled with music.
- alapoet, on 07/22/2008, -8/+6Actually, I do, in fact, need music.
I think lots of folks do.- granolajoe, on 07/23/2008, -1/+5I couldn't imagine a day without music. Food, on the other hand...
- minnymoo, on 07/23/2008, -0/+9i once ate my entire collection of Pink Floyd to survive in the Amazon.
true story, kinda. okay, no. but i love my music.
- alapoet, on 07/22/2008, -8/+6Actually, I do, in fact, need music.
- SouthernGuy118, on 07/23/2008, -4/+18it's sad they get paid little, because farming is HARD work.
On top of that, farmers' profits regularly get raped by mother nature. Now they get raped by food corporations- jmpeagle, on 07/23/2008, -6/+11except the average farmer makes 33% more than the average American according to the USDA in 2004. With prices today, you can bet they are doing much better than that.
- SouthernGuy118, on 07/23/2008, -7/+8yeah, and then you remember that large percentages of that money are poured back into investing in the land that keeps them working
- jmpeagle, on 07/23/2008, -0/+10net income includes investments into the land...so that value is after deducting all their business expenses
- Bamont, on 07/23/2008, -1/+7@southernguy118
The cost for up-keep on farms and equipment has actually gone down (aside from the price of energy), so I fail to see how your argument is at all logical. They've always had the costs of upkeep, and now make 33% more than the average American, and almost twice what they did 10 years ago. - MacEnvy, on 07/23/2008, -1/+5The average farmer, but not the median farmer. It's disingenuous to lump together small family farms and large corporate farms.
- koft, on 07/23/2008, -0/+5@bamont
Beware of the stats, the agromegacorps are lumped into the sum. - subterfuge, on 07/23/2008, -1/+3@MacEnvy
why is it disingenuous to compare small farms with large farms? is it also disingenuous to compare small retail stores with large retail stores and small electronics companies with large ones? they are in the same business and SHOULD be compared. - bobbi21, on 08/23/2008, -0/+1I think you might have missed the point subterfuge. By comparing small family farms to larger ones you get a totally messed up mean.
Lets say you have 10 farmers. 9 of them are family farms and they make $15,000 a year each. They're barely surviving. They're probably on welfare, eating what they grow. hand me down clothes. furniture from the 60's, etc. Then you have 1 "farmer" who is the CEO of iceberg lettuce. He makes $30 mill a year. The average farm therefore makes $3 mill a year.
And then you get media saying the government gives farmers thousands of dollars in welfare when the average farmer makes $3 mill a year! Yeah. that's totally fair.
- skipdog172, on 07/23/2008, -0/+4farmers must be poor in states other than nebraska then. farmers certainly aren't poor here...
- jmpeagle, on 07/23/2008, -6/+11except the average farmer makes 33% more than the average American according to the USDA in 2004. With prices today, you can bet they are doing much better than that.
- jmpeagle, on 07/23/2008, -4/+20and oil companies only keep 10% of the price of gasoline we pay at the pump...it's all in quantity.
- subterfuge, on 07/23/2008, -1/+1if you think the price of gas is unreasonable,
buy a hybrid. - sharkus414, on 07/23/2008, -1/+1But the prices of hybrids are even more unreasonable!
- NonLeftistDiggr, on 07/23/2008, -0/+2It's actually lower than that, 10 percent would be crazy profit off a gallon.
- MaceSoul, on 07/23/2008, -0/+2It's 5%, btw.
- subterfuge, on 07/23/2008, -1/+1if you think the price of gas is unreasonable,
- TJ11240, on 07/23/2008, -2/+14http://www.newdream.org/marketplace/eat_well_guide ...
Support local farmers markets. - TomJoad, on 07/23/2008, -3/+14stop raising corn, start raising hell.
- santaliqueur, on 07/23/2008, -0/+5That is bumper sticker material.
- MacEnvy, on 07/23/2008, -1/+4Stop raising children, start lowering demand.
- smacksaw, on 07/23/2008, -0/+1I don't know why, but I picture some sort of Soylent Green Children's Gladiator Battle when I read that comment...
- mcm020, on 07/23/2008, -0/+1You grabbed that from a WSJ article on here a couple days ago.
- K1I2M3, on 07/23/2008, -1/+9What a horrible rate. I get my produce from farmers markets.
- Screwy1138, on 07/23/2008, -4/+33That's dumb. 20 cents out of the dollar is pretty good given the whole supply chain.
Yes, farmers markets are great.- dzw120, on 07/23/2008, -0/+10Agreed, 20% is very good if that really is the profit margin. For people that don't know, grocery stores average around a 2% profit margin. Retailers like Wal-Mart are roughly at 4%. The article also factored in taxes before arriving at 20% so in fact the margin is even higher.
I really can't feel bad for farmers when they are on average more wealthy than the rest of the population. (www.ers.usda.gov/AmberWaves/April05/Features/FarmRetirement.htm) Also take into consideration that some farmers pay migrant workers very poorly. And that billions of our tax dollars are used for farm subsidies when farmers are better-off than most of us. They're not getting any pity from me with their fat 20% profit margins.- Temo1, on 07/23/2008, -0/+220% isn't the profit margin... it's the portion of food revenue received by farmers. Which, I agree, isn't all that low.
- dzw120, on 07/23/2008, -0/+1I'm not certain about that Temo1 - the "breakdown" factors in things like "repairs", "labor", and "depreciation" separately from "transportation", "packaging", and "advertising", which makes it seem as if 20% really is the profit margin, and that the 20 cents isn't just revenue.
- xenuxenuts, on 07/23/2008, -1/+2That's not the profit margin though. They're saying that if you spend $1, $0.20 on average goes to the farmer. Nothing is said about profit.
- crusier32, on 07/23/2008, -1/+2You guys don't understand. Twenty percent is not the farmers margin. The twenty percent is the gross that the farmer gets per unit sold. Once you take out the cost of producing said unit you are looking at a margin of five to 10 percent. Which is fairly close to what you would expect from any business.
- Screwy1138, on 07/23/2008, -0/+1Yeah, I didn't say profit margin. I just said 20 cents on the dollar. The point being, given all the transportation, processing, packaging, reselling... that there is 20 cents left is surprising, not because of how little, but because of how much.
My grandpa farmed and I have TONS of respect for farmers. I support and encourage EVERYONE to use farmers markets for your health as well as supporting your LOCAL farmers.
- Screwy1138, on 07/23/2008, -0/+1Yeah, I didn't say profit margin. I just said 20 cents on the dollar. The point being, given all the transportation, processing, packaging, reselling... that there is 20 cents left is surprising, not because of how little, but because of how much.
- dzw120, on 07/23/2008, -0/+10Agreed, 20% is very good if that really is the profit margin. For people that don't know, grocery stores average around a 2% profit margin. Retailers like Wal-Mart are roughly at 4%. The article also factored in taxes before arriving at 20% so in fact the margin is even higher.
- kinerry, on 07/23/2008, -5/+2220% margins...***** I need to start selling food!
- heliox, on 07/23/2008, -2/+2You like 20% margins?
- koft, on 07/23/2008, -3/+3you're being pedantic. 20% of the sale is more than 90% of what most businesses are getting.
- heliox, on 07/23/2008, -1/+1Not really. 20% on a sale is not that good.
- gaapgod, on 07/23/2008, -0/+2Yep. It's way more than the oil companies.
www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702399.html - heliox, on 07/23/2008, -1/+1@gaap
Then I guess you are in the oil industry?
- trevorh, on 07/23/2008, -0/+4Who said anything about 20% profit out of that 20% farmers have to cover their costs of fuel, equipment, seed, fertilizer, and all of their other expenses.
- heliox, on 07/23/2008, -2/+2You like 20% margins?
- judicar, on 07/23/2008, -4/+9Yeah, I'm not sure what business the submitter is in but 20% margins is pretty damn good.
Apple (the company) has profit margins of less than 14%.
http://finance.google.com/finance?client=ob&q=NASD ...- heliox, on 07/23/2008, -1/+3I guess it depends on the industry. I'd get fired if I let mine drop below 50%
- xGraphite, on 07/23/2008, -1/+4It says the farmer get 20 cents on the dollar the consumer spends at the end. Don't forget that it costs that farmer 18-19 cents of that 20 to produce the wheat/corn/sugar/whatever.
- xenuxenuts, on 07/23/2008, -0/+1apples and oranges. They're not talking about profit margins being 20%.
- DucoNihilum, on 07/23/2008, -4/+9They don't make any actual money from farming, they make all their money from subsidies.
- Defuser, on 07/23/2008, -4/+12Boy, only 20%! That sucks! Maybe they can figure out a way to increase profits, like maybe coming up with a way that each and every American will have to use their product multiple times a day.
- Pic0, on 07/23/2008, -0/+2Reusing food would have bad results.
- MASH007, on 07/23/2008, -0/+6SVOboy I would suggest taking an ECON 101 class :-)
- Ninnux, on 07/23/2008, -3/+5@sneakytop :: Not all farms are evil. There is a growing movement (no pun intended) in local agriculture, local market models. The data suggests the food is healthier too. The downside is that it costs more, but only because all of the costs are exposed, not hidden as someone else's problem.
Large agri-businesses are, however, tangible evidence of evil in nearly every sense of the word.- kinerry, on 07/23/2008, -1/+2They also give lower crop yields. In the US this isn't a big deal, but real people die in third world countries because of the rich wanting "organic".
- mboudro, on 07/23/2008, -0/+1Too people die because we feel we need to use corn in our fuel. How ignorant.
- kinerry, on 07/23/2008, -1/+2They also give lower crop yields. In the US this isn't a big deal, but real people die in third world countries because of the rich wanting "organic".
- xsecretfiles, on 07/23/2008, -4/+1Isn't that like Million Pesos?
I bet the Mexican workers appreciate that.... - TinternAbbot, on 07/23/2008, -0/+5Not if you go to a farmer's market.
- PoserDad, on 07/23/2008, -2/+3There are many industries/businesses that profit 20%. That's not that bad.
- Ghoztt, on 07/23/2008, -0/+8Buy from your local Farmer's Market!
- mandarin, on 07/23/2008, -4/+4Fat chance when the local Farmers Market is charging a lot more than the usual supermarket.
- Jebra, on 07/23/2008, -0/+4But it's 10x quality, usually completely organic, and the nice farmers will throw in extras for you and let you try everything. Become a regular and they'll give you a discount.
- punkcat, on 07/23/2008, -0/+1so a tomato has 10x the nutritional value from a farmers market?
- mandarin, on 07/23/2008, -4/+4Fat chance when the local Farmers Market is charging a lot more than the usual supermarket.
- smacksaw, on 07/23/2008, -1/+3I grew up on a ranch, and I've racked my brain my entire life trying to figure out ways to cut a balance between subsidies and open borders. The best I can come up with is some sort of private FEMA-like thing where farmers would basically be free to do whatever they want, but in case of disaster they could be rescued. And I think you need tit-for-tat protectionism. Obviously, if something happened to a corn harvest and we had to subsidise it, it would only be fair if Mexico slapped a tax on our corn exports. But if Canada wants to make a special "levy" on dairy and then justify taxing our dairy exports to them, we should tax their exports until it's equalised. Of course NAFTA screws that all up...
- mboudro, on 07/23/2008, -0/+2NAFTA screws up a lot more than that...
- smacksaw, on 07/23/2008, -0/+1True, but everyone is harping on farm subsidies and large agribusiness/corporate farms and are leaving NAFTA out of it.
- mboudro, on 07/23/2008, -0/+2NAFTA screws up a lot more than that...
- chancel, on 07/23/2008, -2/+12What a stupid article because all of the examples listed require processing. Farmers don't grow Beer or potato chips. The grow wheat and potatoes. That is the same as saying farmers only get 1 cent from a cotton shirt, overlooking that fact of what it took to turn the raw product into something usable.
Show me a list of basic items, like corn on the cob, tomatoes, etc., and how much the farmers get from those purchases. - koft, on 07/23/2008, -2/+2they get 1/5th? not bad actually.
- plhofmei, on 07/23/2008, -1/+1This is typical in any business supply chain. Note, "what the farmer gets" from what I understand is after all his costs, distrubtor costs, and distribution markup, aka "his profit". This isn't atypical for business (except if you consider his margins are better!). You might be surprised what the manufacturer gets for a tube of toothpaste. *shrugs*. Article buried for being sensationalistic and not really news.
- Arkons24, on 07/23/2008, -2/+3Sounds fine to me.
- cygnus2112, on 07/23/2008, -4/+3I buy organic vegetables from the local farmer's market. If the farmer is only getting $.20 from the bag of apples, who is coming to steal the rest?
- exodouseternal, on 07/23/2008, -2/+3Thats more than a band gets for a making a record. Too bad we can't have a torrent/napster/limewire for corn. Down with the system!!!!
- mandarin, on 07/23/2008, -1/+2Blame Whole Foods and not the consumer.
- krnldmp, on 07/23/2008, -0/+4Those of you saying that's good "margin" should probably understand that 20% ain't profit, its net, which means most farmers aren't exactly swimming in cash.
- sharkus414, on 07/23/2008, -0/+0It's not "net", it's "gross" retard.
- twmulloy, on 07/23/2008, -4/+1waaaa, only less developed countries rely heavily on agriculture. the u.s. has long since moved from being less developed.
- jimoase, on 07/23/2008, -0/+3A bag of seed corn is $200 and covers just over 2 acres. Add fuel cost, insurance, equipment cost, fertilizer, herbicides, cost of living as the Senator from Pekin, IL once said "a million here and million there and pretty soon you're talking about real money". That plants the crop, then there is the weather.
How many of us can afford to plant just a section, 640 acres?
Jim - zmigliozzi, on 07/23/2008, -1/+1It's like we don't spend billions on food...
- maiku00, on 07/23/2008, -0/+3look around your area for farmers markets, they are all over the place. the freshest and healthiest food you can get, and you are supporting your local farmers.
- Treoinmypocket, on 07/23/2008, -5/+1Farmers make $0.20 per dollar on food?
The oil companies make $0.08 per dollar....
When are the hearings in Congress to create a windfall profits tax on farmers going to begin? - schmae, on 07/23/2008, -3/+0Shoot...If I got 20 cents on every dollar of food americans buy...I would be hella rich. And that doesn't count the subsidies and government lobbyists getting them tons of cash on top of it.
- Temo1, on 07/23/2008, -1/+2Hmm, of all the foods they list, only the lettuce and (Maybe, considering the gigantic economies of scale) the skim milk are the only things you can find at farmer's markets.
The rest require not-insubstantial amounts of processing costs to make, of which no farmer's market would (or could) bear the cost. - MaceSoul, on 07/23/2008, -2/+220% return isn't bad in any business.
- JohnLawson, on 07/23/2008, -4/+3buried for biased, one sided spin.
Farmers make a ton of money. That's why they are able to afford multiple 100,000 dollar machines every couple of years. That's why the government pays for their gasoline. That's why they get ENOURMOUS tax breaks on their land.
Oh, but the poor farmer only makes 20 cents for every dollar we spend. OH, the poor farmer is subject to the rains and drought, which are covered by insurance and the government hand outs. Oh, the poor poor farmer.- ajcronk, on 07/23/2008, -0/+1You know nothing apparently.
It's the farmer's fault for the price of implements and tractors? They have to pay what the market asks. I'm sure they get tons of joy at spending 270,000 on a combine (without headers).
The government doesn't pay for gas, there's just a reduction in the form of no federal tax on it.
Insurance pays like 60% of what you'd get normally, and what you get normally isn't that hot. I'd also like to see all you lazy diggers go out and put in the 60-70 hour/week that it routinely takes to run a moderately sized farm.
Government hand outs also come at the expense of getting to play by all the government rules, so it's not like it's without strings attached either.
Moron.
- ajcronk, on 07/23/2008, -0/+1You know nothing apparently.
- smacksaw, on 07/23/2008, -0/+3I would add that most farmers' markets are closed from October to April. Snow and rain tend to sort of mess that up.
- PalIkas, on 07/23/2008, -0/+1Some people think farmer means Corprate idiot farms...
But it's the local, small time farmer that really is under valued and they grow far better food then
the no respect, no pride, CorpozRat idiots working their bottom line!!!! - GoatMonkey2112, on 07/23/2008, -0/+1If it's that bad they should stop doing it.
All of the other people involved need their share. Packagers, transportation, stocking, sales, advertising, etc. All of those guys are earning their living too. Why should the farmer make all of the money? - Pic0, on 07/23/2008, -0/+1oh no not 20%, how do they live on those wages....
Seeing that I would spend almost $15 for 6ish chicken breasts, they get $3!
Recently a farmer was interviewed on NPR and he said he is making the big bucks now. He knows it probably wont last, but he bought some new equipment he needed to improve his farming. Farm equipment is expensive! - itsthebrod, on 07/23/2008, -1/+1God these idiotic, sensationalist stories on Digg built around utter ignorance of simple economics are really starting to get to me. They only get 20%? So ***** what?! That sounds pretty good to me, especially when considering how costly it is to transport and store foods. Compared to that, farmers have the easy job.
- ajcronk, on 07/23/2008, -1/+0Farmers store and transport food too.
Grain bins = $$$$
Trucking costs to take the grain to the elevator + fuel! = $$$$- itsthebrod, on 07/23/2008, -0/+1And those costs don't even compare to the costs involved by transporting fruits and vegetables across the country in a timely manner. Please, get a clue.
- ajcronk, on 07/23/2008, -1/+0Farmers store and transport food too.
- illusion2269, on 07/23/2008, -0/+4I wonder how many of the people commenting on here have actually worked on or grown up on a farm instead of just driving by one. I grew up on a small family farm, and my father never bought brand new machinery every so many years. He was smart and would get good used machinery, fix it himself when he could, and use it for many years. He is still using a few of the same tractors now that he used when I was growing up and helping out on the farm. With all that, he was still barely able to squeak out a living for us many years without either him or my mother working a 2nd job.
To those people who are looking at the 20% as "margin" don't understand basic economics. That is their gross take. It really does cost alot of money to buy seed, plant, cultivate, spray, water, de-weed, harvest, and truck the food that goes on your plates. Subtract those costs from the money they get for their products, and you're not left with very much anymore. Yes farmers do also carry crop insurance, but I don't know of any business that doesn't carry some kind of insurance that will protect them against loss.
So before you start thinking that family farms are rolling in the dough, try putting yourself in their shoes first. Just my 2 cents. - mctom987, on 07/23/2008, -0/+1When did the RIAA take over the food industry too?
- purkel, on 07/23/2008, -0/+1the food industry has some of the lowest revenues around. i dont know where this 20% profit idea came from... but my family's beef business is lucky to make 2%
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