Stay Informed

In a year when prices for all farm inputs have increased dramatically, the fact that another kind of input – food – has jumped in price as well comes as an unpleasant surprise to all consumers, including farmers.

       “It’s been a difficult year so far, and the increased cost in food is a concern,” said Isabella Chism, Indiana Farm Bureau 2^nd vice president. “Consumers are seeing the impacts of a perfect storm of factors that are driving up prices.”

According to the Bureau of Labor Statistics, the consumer price index rose 8.6% in May compared to a year ago, with food prices jumping 10.1% over that time. The main drivers of the increase are inflation, global supply chain issues from the war in Ukraine and lingering disruptions due to COVID-19, explained the American Farm Bureau Federation.

The overall price increase also is reflected in Farm Bureau’s summer cookout market basket, an annual informal survey of the price of foods typically found at summer cookouts, such as ground beef, chicken breasts, canned pork and beans, potato salad and potato chips. The survey is taken at the state level; data from state Farm Bureaus is then compiled into a nationwide survey released by AFBF.

INFB’s summer cookout market basket indicated that Hoosiers are paying an average of $64.32 to feed 10 people this summer, or $6.43 per person – a 13% increase compared to last year. This is, however, 7.7% lower (56 cents) than the U.S. average price of $6.97 per person found in AFBF’s survey. Additionally, the Indiana price is 7.2% lower (54 cents) than the average price for the Midwest region of $6.93 per person.

“This year’s summer cookout market basket reflects what Hoosiers are seeing when they go to their local grocery stores. However, our cookout costs here in Indiana are less than the average cost for the rest of the country and even our neighboring states here in the Midwest,” Chism said.

In the food supply chain, just 8 cents of every consumer food dollar can be attributed to farm production, after accounting for input costs. Using this figure, the farmer’s share of this $64.32 market basket would be just slightly more than $5. The rest is for food processing, packaging, transportation, wholesale and retail distribution, food service preparation and other marketing costs.

"Generally, farmers are price takers, not price setters,” said Chism. “Farmers are consumers too, and we are experiencing the surge in prices on the farm as well as in the grocery store like other Hoosier shoppers.”

“Despite higher food prices, the supply chain disruptions and inflation have made farm supplies more expensive,” said Roger Cryan, AFBF chief economist. “Bottom line, in many cases the higher prices farmers are being paid aren’t covering the increase in their farm expenses. The cost of fuel is up and fertilizer prices have tripled.”