As Thanksgiving approaches, food prices might be a topic of conversation around your dinner table. Dr. Rob Johansson, Director of Economics and Policy Analysis at the American Sugar Alliance (ASA) and the former Chief Economist at the U.S. Department of Agriculture (USDA), joined Farm Policy Facts on our Groundwork podcast to talk about the importance of an affordable and accessible supply of American-made sugar.
Dr. Johansson shared that sugar farmers, much like other agricultural producers, are facing the financial stress of higher input costs and inflationary pressures. Although consumers are also seeing higher costs at the grocery store, they might not know that it’s not farmers driving up food prices.
In fact, on average only $0.16 of every $1.00 spent on food goes back to the farmer in the form of crop sales. The rest of that dollar goes to transportation, food production, and marketing, among other costs, which have been rising across the board this year.
Even as commodity prices have increased, farmer costs have also increased. “Farmers are not actually getting a higher return, instead inflation means they’re seeing their costs rise as fast, or more than, their receipts,” Dr. Johansson said. “Our producers aren’t seeing the adequate revenues to cover the rising costs of producing the crop.”
Thanks to U.S. sugar policy, sugar prices at the grocery store have remained relatively stable, increasing only several cents above its price a decade ago, and sugar has remained stocked on store shelves. Yet, corporate candy companies and other food manufacturers are utilizing the stress of inflation to try to dismantle U.S. sugar policy – while at the same time blaming inflation for their own price increases to pad already healthy profit margins.
“While our industrial food manufacturing customers have been complaining about sugar prices, they themselves have been raising the price of their products for consumers,” Dr. Johansson pointed out.
“It is frustrating to hear statements out there about companies that want to dismantle the sugar program in the U.S. because if you play that out to the logical conclusion, it’s ultimately going to hurt them, not help them.”
We hope that you’ll keep in mind the immense challenges farmers are facing as they work to feed a hungry world, and the fact that even as inflation raises costs, American farmers and our food system still provide a bounty of food choices at the lowest prices in the world.