A grower called me yesterday to discuss some issues he’s concerned about. He says one topic could get him blacklisted by retail buyers, so he asked me to keep his name anonymous. That topic? Crop prices.
Consumers are paying a lot more for their produce this year, creating a boom economy for just about everyone in the food industry. Except for farmers.
We’ve all heard the news stories about soaring food prices. Even though vegetable and fruit prices are up, if you hunt up charts for how much each category is up, you’ll quickly find that vegetables are at or near the bottom of the list.
Compared to 2021, August 2022 vegetable prices rose 7.6%, according to the Bureau of Labor Statistics. A nice amount, and higher than most of 2022. Eggs rose 39.8%, however. Dairy was up 16.2%. Meat prices have been falling for the past couple of months but were still 10.6% higher.
Meanwhile, produce growers pay the same increased costs for fertilizer, shipping, and fuel that all sectors pay.
The only way to address the topic, this grower argues, is for farmers to band together on crop pricing. No one wants to fix prices, he says. But there should be base prices per crop, per season. A line where prices do not go below.
One of his farming neighbors recently retired in his 80s. The poor man has almost no money, despite working hard his whole life. He was a grower who always had a better price than everyone else. And in the twilight years of his life, he has nothing to show for it.
Personally, I’m not sure it’s possible to get independent-minded growers to work together on something like prices. But there’s a lot of merit in discussing the issue with fellow growers.
It’s a lot like breaking the rule many corporations have about not discussing salaries. If employees compare notes, they’ll have to deal with demands for better pay from those not earning as much as a peer.
If growers are talking about the retail purchase prices, it will help your negotiations with your buyers. You know you aren’t being unreasonable in asking for a better deal, because you’ve heard about what your fellow growers are also dealing with.
It’s time to stop worrying about being undercut by competitors. You land your contracts and your sales on much more than competitive prices. Your quality, your reliability, and your production practices. America needs its vegetables grown here by those who pump money back into the local economy. Ask for more. You might be surprised by what you gain.
Oh, One More Thing
Here are some of the economic reports on food prices and farm costs making news this year.
- 0.8% Month-to-month food price increase in August 2022 — the lowest increase of the year.*
- 13.5% Year-to-year food price increase in August 2022.*
- 9.4% The amount fruit and vegetable prices rose from August 2021 to August 2022. *
Graphic courtesy of USDA
* Source: Bureau of Labor Statistics