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Shift lower can be attributed to food prices rising nearly 4% over last 12 months.
November 25, 2020
For every dollar Americans spend on their Thanksgiving dinner this year, farmers and ranchers will earn approximately 11.9 cents, according to the National Farmers Union (NFU). This marks a slight decline from 2019, when farmers claimed 12.15 cents of the Thanksgiving food dollar.
Although farmers’ increasingly smaller share of food expenditures could be blamed on dropping commodity prices in years past, that isn’t the case this Thanksgiving; after cratering at the start of the COVID-19 pandemic, prices for many agricultural products have mostly recovered. Instead, the shift can be attributed to higher grocery bills. In the last 12 months, food prices have risen nearly 4%, far outpacing the 1.4% rate of overall inflation.
Even though consumers are paying 4% more for food, almost none of that is being passed on to farmers and ranchers. NFU said it is being captured by the processors, packers, distributors and retailers in between.
“Nowhere has this been more evident than the meat sector; retail beef prices have increased more than 10% over the last 12 months, but ranchers are earning essentially the same amount for cattle as they were a year ago,” NFU noted.
The organization believes the disparity is due largely to the market power held by the largest beef packers.
NFU said the rise in food prices couldn’t come at a worse time for American families, who are experiencing elevated rates of unemployment and food insecurity as a result of the COVID-19 pandemic.
“Ordinarily, Thanksgiving is a time to gather with our loved ones and enjoy a big meal, but for many Americans, the typical, food-filled get-together won’t be possible, and not just because of public health concerns,” NFU president Rob Larew said. “With millions out of work and no additional government support in sight, the cost of traditional holiday foods may simply be out of reach for some families.”
NFU said it has been pushing legislators to expand the nutrition safety net in order to offset an abrupt rise in food insecurity due to the pandemic. Congress took some steps in that direction with passage of the Coronavirus Aid, Relief & Economic Security (CARES) Act in March, which added $15.5 billion to the Supplemental Nutrition Assistance Program (SNAP) in order to accommodate more participants and facilitated the redistribution of surplus food from farmers to food banks. In the subsequent eight months, however, most of the CARES Act funding has been spent, and there has been little progress towards securing additional support for nutrition assistance programs.
“As [COVID-19] cases continue to rise across the country and safety measures are put in place, it’s clear that we have a long way to go with economic recovery,” Larew said. “In the meantime, it is a moral imperative that we ensure every single American has access to the food they need. By far the most cost-effective and efficient way legislators can achieve that is by expanding SNAP benefits.”
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