The commodity harvest for grains and oilseeds is happening in North Dakota. It’s the time of year when we celebrate our hard work and hope to reap the benefits of a good harvest.
Sadly, we are facing low commodity prices across the board that will limit profitability and most likely leave us with losses. This situation is similar in the livestock industry and most other products farmers and ranchers produce.
In the middle of this month, National Farmers Union will be hosting a virtual fly-in. Most of the focus will be on market reform concepts, which I pushed as our primary issue. This includes dealing with low commodity prices.
It’s time we, as farmers, tell politicians and consumers to connect the dots. For too long, we have lived in a “cheap food policy” world. This policy rewards processing industry giants and penalizes farmers, ranchers and consumers.
“Free trade” was touted as the policy that would save our farms. The thought was the U.S. would feed the world by producing more, lowering prices and competing globally with other countries for market share. Interestingly, we continue to lose market share, our prices are lower and we still do not compete well in price.
The U.S. is exporting a lower percentage of its share of the world’s trade than before, even with lower commodity prices. The winner in free trade has been the processing industry and their access to lower priced goods for which they charge consumers more. They have no desire to label the source of those products or share profits with farmers and ranchers.
Consumers need to look at the prices they pay and then look at the price the farmer receives. Only 11 cents of a 2-pound loaf of bread, priced at $3.99, goes to the farmer. Only 4 cents of a six-pack of beer, priced at $9.99, goes to the farmer. Only 57 cents of a pound of bacon, priced at $5.33, goes to the farmer.
Do not blame the retailer for this price disparity. They earn a small percentage of the food dollar, too. The profit centers are in the concentrated processing industry.
Farm programs are written for food security. They are a backstop for income when supplies are so large prices collapse. Working correctly and if enough dollars were budgeted, these programs would help farmers in a time of need and maintain adequate food for the nation to stabilize food costs. But we have cut farm program funding, lowered safety net values, killed demand, been forced to legislate ad hoc disaster programs, and consumers still see higher prices on shelves that are not fully stocked. Meanwhile, large processors are making record income.
How did processors get in the position to manipulate the market? It has been years in the making, allowing and ignoring monopolistic practices. We have antitrust laws that were developed decades ago to break up entities that garnered too much market share. We have simply ignored our laws and tools to stop monopolistic practices. Farmers and consumers are the ones who pay the price. Politicians continue to ignore this reality. Processors have even limited the consumer’s right to know where their food comes from.
Your farm organization has been pushing for fixes to this issue for years and will continue to do so. It’s too bad that it took a global pandemic for some to see rising meat prices, shelves empty, processors making record profits, and farmers and ranchers euthanizing animals due to oversupply and processing capacity.
Farmers and ranchers, do not miss this opportunity to share our story! The time is now for market reform and corrections. Food security has value. Family farms and ranches provide diverse production to maintain food security. Much of the world does not have the food security we enjoy in the U.S.
Farmers and ranchers, please help politicians and consumers connect the dots.
— NDFU President Mark Watne