Price of flour going up by 90% in Canada !

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Still a great buy
By John Schlageck

Kansas Farm Bureau

Listening to, reading or watching the latest news could lead today's consumer to believe this country's farmers are one of the main reasons for the recent increase in food prices at the supermarket. Producers in agriculture would argue this simply is not true.

While food prices at the grocery store have indeed risen, this increase remains far lower by comparison than the skyrocketing jump farmers and ranchers are paying for input costs.

The reason for today's upward pull on retail food prices is in large part due to higher energy and transportation costs, increased U.S. exports due to a weaker dollar and rising labor and health care costs. Higher commodity prices for corn, wheat, soybeans, etc. are also part of this equation.

Still, farmers don't share proportionately in this increase at the grocery store and they certainly don't have a say when it comes to what they must pay to produce their crops and livestock.

So where does the average American consumer dollar spent on food go?

Here's the current breakdown.

Profits make up 4 percent. Depreciation and repairs account for 5 percent. Interest totals 6 percent. Taxes and other costs are 6.5 percent. Labor amounts to 38.5 percent. Energy and transportation is 8.5 percent. Advertising and packaging is 12 percent and the farm value is 19.5 percent.

Still food prices are a great buy and without question, the wise shopper must be knowledgeable when spending her or his hard-earned dollars.

Looking at the cost of a handful of typical items in a grocery cart, cornflakes for example, there is approximately 12.9 ounces of milled corn in an 18-ounce box of this cereal, according to the U.S. Department of Agriculture's Economic Research Services.

"This is expected to raise the price of a box of cornflakes by about 1.6 cents or 0.5 percent," according to Terry Francl, senior economist at the American Farm Bureau Federation

If you look at soda and the corn syrup in a two-liter bottle, it contains approximately 15 ounces of corn in the form of high fructose corn syrup. With the increase in corn at this time the price of soda will increase by 1.9 cents per two-liter bottle or 1 percent, according to the U.S. Department of Agriculture.

Turning to poultry increases at the supermarket, a pound of retail chicken uses 10.6 cents worth of corn (chicken feed) or about 5.2 percent of the average retail price of chicken breasts. Using the average price of corn for '07 and assuming producers do not change their animal feeding practices, retail prices would rise 5.2 cents or 2.5 percent, according to USDA's Economic Research Services.

Using the same corn data, retail beef would go up 14 cents per pound, or 8.7 percent, while pork prices would increase 13 cents per pound or 4.1 percent.

Although ethanol is sometimes blamed for higher food costs what is not taken into consideration is that ethanol has helped lower both farm program payments and gasoline prices, Francl adds. He estimates farm program payments have been reduced as much as $12 billion and that gasoline costs have been reduced as much as $14 billion due to ethanol. This is a $26 billion savings for taxpayers and consumers or the equivalent of a 2 percent change in the food consumer price index.

U.S. consumers spend less than 10 percent of their disposable income on food products they eat. The price they pay for home supplies, cigarettes, videos and just about anything else you can cram into a shopping cart is another matter and should not be confused with food.

This country remains blessed with the most affordable, healthy food anywhere on the planet. We are fortunate to spend as little disposable income as we do on the food we feed our families.

4/14/08


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The price of Hard Red Winter Wheat has fallen form $12.45/bushel to $10.13/bushel in recent weeks.  That's a 19% drop in price.  Oil remains at record highs. 

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Wheat: Wheat futures closed lower on Friday. The increased world wheat production number and higher than expected winter wheat forecast pressured prices today. USDA pegged the 2008 U.S. winter wheat crop at 1.778 billion bushels, up 17% from last year and over 70 million above trade estimates. World wheat stocks in 2008/09 are forecast to grow to 124 million metric tons, up from 110 million this year. CBOT Jul was 17 1/2 cents lower at $8.04 1/2 and KCBT Jul was 22 1/2 cents lower at $8.45 1/2. MGE Jul ended 1/4 of a cent lower at $10.03 and Sep was 14 1/4 cents lower at $8.95 3/4.

source-Greg Scheer AgProfessional.com

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Oil is going up.  Wheat is going down.

[Chewla]

Happy Friday, all!     I know this thread is a bit old, but... this related AP article in my email caught my attention and I thought I'd post it for the curious:



Custom cutters, farmers brace for expensive winter wheat harvest amid soaring fuel prices 

 May 30, 2008 Associated Press Online 
By ROXANA HEGEMAN


WICHITA, Kan., May 30, 2008 (AP Online delivered by Newstex) -- Custom cutters and farmers alike are bracing for what will likely be the most expensive winter wheat harvest ever amid record high fuel prices.


Steve Shepherd, president of U.S. Custom Harvesters, an industry trade group, said custom cutters don't even know how much to charge farmers this year amid rising costs. He suspects there will be hard feelings.


"Our costs are so high and farmers are going to be against it. Everything went up," said Shepherd, of Onida, S.D., who has been harvesting crops in Arizona and California for three weeks. In that time, gas prices have risen 65 cents a gallon, he said.


And it's not just fuel that is going up -- equipment and other costs are increasing as well.


"It is going to be the most costly harvest," said Kevin Dhuyvetter, a Kansas State University agricultural economist who produces the U.S. Custom Harvester's annual Custom Harvester Analysis and Management Program report.


Farmers can expect to pay between $7 and $10 per acre more to cut their wheat this year compared with a year ago, said Robert Belt, a custom cutter from Kingman.


The cost of custom cutting is figured based on negotiated prices for cutting and hauling the crop per acre, and considers the yields in the calculations. And then there is the fuel surcharge. All told, it may cost farmers around $35 per acre to cut a typical 40-bushel-per-acre field, Belt said.


He said he spends between $3,000 and $4,000 a day in fuel to run his five combines, which doesn't include the gas he puts into the grain trucks that haul the crops to elevators.


This season's harvest costs will be eased somewhat by the soaring prices farmers are getting for those crops.


Farmers who have normal yields this year -- and sell their crop at current prices of around $7.50 a bushel -- are going to make money, Dhuyvetter said.


Winter wheat is seeded in the fall for harvest the following summer. It has become popular because it saves farmers time in the spring, and yields have been strong in recent years. Also, prices have moved closer to those for spring wheat after years of running behind.


Winter wheat harvest is now under way in southern states like Texas and Oklahoma.


With the harvest at least three weeks away in Kansas, some farmers here are also concerned about whether there will be enough custom cutters to harvest the wheat crop in a timely fashion.


Cool, wet weather has delayed crop maturity in southern counties where the harvest typically begins, said Dusti Fritz, chief executive officer for Kansas Wheat, a venture of the Kansas Wheat Commission and the Kansas Association of Wheat Growers.


"We are probably going to be harvesting in all four corners of the state at the same time," Fritz said.