Food Prices Are Not Driven by Drought

Google “drought” and “food prices,” and you will get pages of dire warnings about how the drought is going to drive up food prices. The connection seems obvious, but it’s not as simple as the news stories make it sound. The cost of growing food is only a small percentage (on the average, less than 20 percent) of the price you pay for it.

“Rocky Mountain Farmers Union promotes local foods because direct sales eliminate so many of the hidden costs,” said RMFU President Kent Peppler, a Mead, Colo., farmer. “When consumers buy a box of corn flakes for $4, the farmer gets eleven cents. That means if the cost of corn doubles, the cost of cornflakes should go up eleven cents.”

More than 80 percent of the food price in the grocery goes to manufacturers and marketers. The more manufacturing, the less the farmer’s share. Twenty-three cents worth of potatoes go into a $4 bag of chips; A two-liter bottle of soda contains 12 cents worth of agricultural products. Even fresh produce has huge overheads; only ten percent of the cost of tomatoes goes back to the folks who grew them.

“Of course the drought will drive up the cost of food,” Peppler said. “But don’t be fooled by price exploiters looking for an excuse to put it to the consumer and blame farmers. Shop your farmers markets, join a CSA or a food co-op, and you will be using your food dollar wisely.”