September 4, 2009

Farmers not seeing profit in food prices

Farmers in ventral Canada say despite rising food prices, they aren't seeing income gains.

Agricultural groups in the provinces of Alberta, Saskatchewan and Manitoba released a survey showing food prices rose 3.2 percent on an annual basis compared with 2008, yet farmers' incomes fell by 1.7 percent, the Edmonton Journal reported Friday.

The exceptions went to grain and dairy farmers, who saw more profits, the survey revealed.

Meat and vegetable farmers took the hardest hit, the survey indicated. Meat farmers' share of profits declined from 28 percent to 22 percent, while vegetables and fruit growers' share declined from 29 percent to 25 percent.

Joe Rosario, senior economist at the University of Alberta's Western Center for Economic Research, told the Journal the consumer trend toward processed and ready-to-eat meals was a factor.

As a commodity gets more and more processed, money to the initial producer tends to decline because you are adding value at each stage of processing, he said.

Canadians typically spend 14-to-16 percent of their income on food, compared with as much as 30 percent in other countries, the newspaper said.