After spiking in 2014 thanks to record-high milk prices, the U.S. farmers’ share of every dairy dollar spent at retail declined in 2015, according to annual data compiled by USDA.
USDA’s Economic Research Service calculated dairy farmers received about $0.29 for every $1 spent by consumers on dairy products in 2015, down from $0.38 in 2014 and the lowest share since 2009 (Table 1).
USDA estimates price spreads from farm to the consumer for several major food categories, including dairy, fresh and processed fruits and vegetables and field crops. The dairy spreads are calculated using data on retail product prices from the Bureau of Labor Statistics and USDA Ag Marketing Service data on milk prices for various classes of milk marketed through federal milk marketing orders. The farm values do not include any over-order premiums.
The overall percentage is based on a “basket” of dairy products typically produced by consumers during the year.
Looking at individual products in that basket, dairy farmers received about $0.48 for every $1 spent at retail for fluid whole milk in gallon containers, down $0.13 from 2014. Every $1 in retail cheese sales returned $0.29, down $0.08 from 2014; and $1 sales in ice cream returned $0.18, down from $0.22 a year earlier. Butter data has not been reported for the past two years.
Over the past 15 years, 2009 was the low-water mark for the producers’ share of the retail dairy dollar.
Summer cheeseburgers: A smaller bite for dairy, beef producers
In a special summer barbecue/July 4th version of “The Farmer’s Share” report, the National Farmers Union (NFU) calculated U.S. farmers and ranchers received about $0.45 from the total $2.45 spent to create an All-American favorite, the cheeseburger.
According to the NFU infographic, the slice of cheese was valued at $0.22, with dairy farmers getting about $0.06.
The cost of the beef patty for the cheeseburger was about $1.52, of which beef producers received about $0.32.
Wheat growers received a penny from the $0.37 bun.
“It is a common misconception that producers are driving up the price of food and getting rich off consumers’ food purchases, but that’s not true,” said NFU President Roger Johnson. “There is a difference between the price of food at the grocery store and the market price of commodities. The majority of food costs account for all the steps of getting the food from the farm gate to your plate, while the family farmers and ranchers who actually produce your food receive pennies of the dollar.”
Farmer’s share about 17 percent
Based on May 2016 prices from USDA, U.S. farmers and ranchers received about $0.174 for every $1 spent by consumers at the retail level. More than $0.80 went for marketing, processing, wholesaling, distribution and retailing, according to the NFU.
In May, a producer’s share of a gallon of fat-free milk, selling for $3.89 at retail, was $1.25.
The producer’s share of a pound of top sirloin steak, selling for $9.89 at retail, was $2.06. PD
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Dave Natzke
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