Farmer's share of the retail food dollar
From the National Farmers Union June 2007 issue:
Item Retail Price Farmer's Share
Multi-purpose flour (5 lbs) $1.95 $0.51
Bread (Wonder, 1 lb loaf) $2.49 $0.10
Wheaties (18 oz box) $5.05 $0.08
Milk (1 gal, fat free) $3.69 $1.31
Potatoes (Russet, 10 lbs) $3.29 $0.84
Potato Chips (Lays, 13.5 oz) $3.49 $0.12
Cheddar Cheese (1 lb) $4.49 $1.60
Boneless Ham (1 lb) $4.29 $0.46
Bacon (1 lb) $3.29 $0.46
Top Sirloin Steak (1 lb) $5.99 $0.95
Eggs (1 doz A-XL) $2.19 $0.72
Carrots (fresh, 2 lbs) $1.89 $0.57
Lettuce (head, 2 lbs) $1.79 $0.37
I don't know the farmer's share of the price of corn flakes is, but I'm sure it's about the same as Wheaties.
The point is, a lot of the cost you pay for food is for processing, marketing, and transportation. Not that those things aren't important, and that those who do the work shouldn't be compensated, but to say that the cost of Corn Flakes is extremely tied to the price of corn is absurd. Corn could go to $10/bu and the cost of cereal would only need to go up a few cents to cover the move. Instead, manufacturers take advantage of input changes to take everyone to the cleaners.
The American Meat Institute recently promoted a research piece that said because of ethanol, food prices for the average American will rise $50/year over the next year. The AMI is upset because now that corn prices are where they should be, they can no longer get cheap corn to feed livestock. Maybe they'll have to start paying a little more, eh?
$50/year is hardly worth mentioning - that's about $4/month. If you use 50 gallons of gas a month, and the price moves up 8-9 cents, you've just spent $4/month more than last. How many times have we seen gas prices move up 8-9 cents in a month? How about in a week?
The point is - Retail food prices are not strongly correlated to the cost of the grains, vegetables, oilseeds, and meats produced on the farm. A greater expense than the original input is the labor to haul, process, market, and haul again. Don't blame the farmer for wanting to make some money and reduce our dependence on foreign oil - look in the mirror instead.