Serving Size: 7
| Commodity Costs based on the following: Peanuts: 20 cents per pound (FSP) | Corn: $6 per bushel | Wheat: $7 per bushel |
Even when commodity prices rise, the effect on retail food prices is relatively small.
There are 56 pounds of corn in a bushel. When corn is $6.00 per bushel, a pound of corn is worth 10.7 cents. At $4.00 per bushel, a pound of corn is worth 7.1 cents.
According to the Beef Checkoff, it takes 2.6 pounds of corn to produce one pound of beef, live weight (includes bone, fat, etc.). This equates to 28 cents per pound when corn is $6.00 per bushel—or just 18.6 cents when corn is $4.00.
It takes 2.0 pounds of corn to produce one pound of chicken, live weight, according to the National Chicken Council. This equates to 21.4 cents worth of corn when corn is $6.00 per bushel; just 14.3 cents when corn is $4.00.
A $3.39 box of Wheaties contains 19 cents of wheat. By the way, putting Tiger Woods’ picture on the box adds 10 cents.
A $2.59 loaf of white bread contains 14 cents worth of wheat.
A 16.3 oz jar of peanut butter contains about 36 cents worth of peanuts.
A can of soda includes 2 cents worth of corn sweetener.
| “The consumers should complain to The Organization of Petroleum Exporting Countries (OPEC) and not to the farmer if they’re unhappy with food prices. The U.S. regularly encounters food inflation even when corn and soybean prices are low or falling. Retailers and food processors typically put an extra markup on top of any increase in commodity prices.”
Michael Swanson, Wells Fargo agricultural economist |
| “Pundits and food and meat processors have lamented this year’s rise in corn prices with little attention to the long-term declining trends in the real price of corn. The implication that rising corn prices warrant grocery store hikes ignores the historical grocery price insensitivity to corn prices.”
Food & Water Watch |
Farm Value Share of Retail Food Price by Category
There’s a big difference between what you pay for food at the grocery store and what the farmer or rancher gets out of the deal. For example, grain farmers only get about 6 percent of what you pay for cereal and bakery items.
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Farm Value Share of Retail Food Price by Food Category |
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| Retail Food Price | Farm Value as % of Food Product Category |
| Cereals and bakery items | 6% |
| Beef | 47% |
| Pork | 30% |
| Chicken | 36% |
| Dairy products | 36% |
| Fats and oils | 17% |
Cost of Farm Inputs as a Share of Prices of Select Retail Food Products
In most cases, farmers get a relatively small share of the final retail food cost you pay. The more processing involved, the smaller the percentage for the farmer. For example, a wheat farmer gets about 5 percent of the retail cost of a loaf of bread.
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Cost of Farm Inputs as a Share of Prices of Select Retail Food Products |
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| Food Product | Farm Value Share of Retail Price (%) | Example Retail Prices ($/lb) | Cost of Input(s) Purchased from Farm ($/lb) |
| Milk, 1/2 gal. | 34 | 3.84 | $1.31 |
| Flour, wheat, 5lbs | 19 | 0.36 | $0.07 |
| Bread, 1 lb | 5 | 1.21 | $0.06 |
| Margarine, 1 lb | 15 | 1.26 | $0.19 |
| Corn Flakes, 18 oz box | 4 | 1.65 | $0.07 |
| Corn Syrup, 16 oz. bottle | 3 | 1.57 | $0.05 |
| Ground Beef, 1 lb | 47 | 2.37 | $1.11 |
| Bacon, sliced | 28 | 3.78 | $1.06 |
| Chicken, fresh whole | 47 | 1.14 | $0.54 |
Source: USDA, ERS (utilizing most current data available for each food product category, as of Oct., 2007)
