The quickest way to get farmers riled is to suggest that the price of food is going up because grain prices are higher.
Say it once, and watch the rosy burn creeping up their cheeks. Say it twice and look out.
Within days after the 2021 version of Canada’s Food Price Report forecasted a three- to five-per cent increase, social media channels were lighting up and farm organizations were pumping out press releases to say “don’t blame farmers for your grocery bill.”
If farmers come off sounding a bit thin-skinned on this issue, it’s because it seems they must confront this tired premise every time someone looks for a simple answer to the complex question of how much we pay, and how much we should pay, for food in this country.
Read through the Food Price Report and sure enough, there it is, stated more than once:
“The price of some inputs like wheat and canola could also impact the cost to process food and could influence prices at retail,” it says.
It also cites other factors but for whatever reason, those become too complicated to explain in how we in the media report on it.
Farm groups were quick to react.
“The price changes quoted in the interview are misleading and do not accurately reflect the on-farm prices wheat producers are receiving for their grain,” Saskatchewan Wheat Commission chair Brett Halstead said in a release. “Wheat producers appreciate that several factors influence store shelf prices, but the cost of wheat is not a major factor in the rise of food costs.”
There’s no denying food prices have risen. The food price report says the average grocery bill has grown 170 per cent over the past two decades. Industry data shows a loaf of white bread that cost $1.31 in 1999 costs about $2.90 today depending on what type you buy.
There are several ways of looking at this. First, while futures prices on United States commodity markets have risen in some cases by 50 per cent, how that translates into the farmgate price is influenced by factors such as currency fluctuations and the cost of handling and transporting that grain to market.
Manitoba Agriculture data shows that the farmgate price in Manitoba in December of 2019 was $6.53 per bushel. In December 2020, it was $6.47 per bushel.
Secondly, how much wheat is in a loaf of bread anyway? One bushel of wheat contains 60 pounds of grain. Grind that into the flour used in a 1.5-lb. loaf of white bread and you will get 42 loaves. So the farmer’s share based on the wheat in that large loaf is about 15 cents.
Canola farmgate prices have risen significantly year over year from $9.86 per bushel to $12.56. You get 11 litres of canola oil from one bushel of crushed seed. You get 67 tablespoons of canola oil out of one litre. Most of the bread recipes I’ve used call for between one and three tablespoons per loaf. There’s no smoking gun there in terms of why that loaf costs more at the store.
A more likely explanation for the projected increased cost of bakery goods would be in the additional costs handlers and processors are facing throughout the supply chain due to pandemic disruptions and the need to retrofit plants to better protect worker safety.
None of us should be complaining about that; the people who do these jobs deserve to be safe.
All that said, farmers generally are having a good year. They harvested a high-quality crop, demand is strong and the export pace is smoking hot — a radical departure from other years when it seemed farmers couldn’t catch a break from the markets, the weather and the railroads.
The Prairie wheat commissions make another valid point. The price farmers get now isn’t all that much different than the $5.66 per bushel they were getting in 1975. Meanwhile, costs of production have done a better job keeping up with inflation. Farmers have been able to survive by constantly improving their productivity and efficiency.
If farmers are making money this year, they’ve earned it. No apologies needed.
Laura Rance is vice-president of Content for Glacier FarmMedia. She can be reached at [email protected].