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Farmers See Smaller Share Of Bigger Grocery Bill

If a Winnipeg family wants to know how Canadian farmers’ wares are faring in the marketplace, they won’t find the answer on their grocery bill, a new study released by Keystone Agricultural Producers suggests.

Shopping trips for the same basket of foods on May 10, 2008 and June 2, 2009 find the grocery bill for a Winnipeg family up 3.2 per cent from one year to the next, while the farmers’ share dropped 1.7 per cent, according to KAP’s 2009 “Farmers’ Share” study.

“In the end, the consumer was paying $6.01 more for groceries, the farmer received 86 cents less, and the middleman received $6.87 more,” KAP said Sept. 2.

The food choices in the study, conducted by Winnipeg consultant Alma Kennedy, were based on a week’s worth of meals following Canada’s Food Guide for two adults, a teenager and a child, with 89 per cent of the foods listed as being produced in Canada.

The total food bill, KAP reported, was $194.23 on the June 2009 shopping trip, compared to $188.22 in May 2008. Depending on the food group, the percentage going to the farmer ranged from five per cent for grain products to 53 per cent for milk and alternatives, for an average share of 27 per cent at the farm gate.

Given that farmers’ costs of production have risen, on average, to about 86 per cent of their total return, that means a grain grower is working for just 14 per cent of five per cent, meaning 0.7 per cent of a basket of grain products goes to the farmer’s net profit.

“That’s not sustainable (and) hasn’t been for some time,” KAP president Ian Wishart, a farmer from Portage la Prairie, said during the group’s presentation.

The study noted the farmer’s share often varied with the number of steps in the chain between the farm and the grocery store.

To get a larger share to the farmer, consumers would want to look for less-processed foods, said Kennedy, a former University of Manitoba professor. As well, she advised consumers to look for locally produced foods, for which transportation makes up less of the retail price.

“Less-processed foods such as vegetables often showed a greater return to the farmer,” KAP noted. “In the case of bread or other grain products, the actual return to the farm gate is extremely small.”

And grain prices are also down, according to Canadian Wheat Board data.

The current pool return outlook (PRO) for No. 1 CWRS wheat at 12.5 per cent protein is $6.42 per bushel, down 20 per cent from the July 2008-09 PRO of about $8, down 36 per cent from the recent high of $9.99 (2007-08) and down from the historic high in 1973-74 of $4.58 – about $20 per bushel in constant dollars.

For malting barley, the 2009-10 PRO of $4.88 is down 29 per cent from the 2008-09 record high of $6.84 in nominal dollars, the CWB noted.

In either case, CWB spokesperson Maureen Fitzhenry said, “there’s no way that the supply-and-demand fundamentals would reflect (that size of a) year-over-year drop.”

The study also noted a rise in the cost of meat at the grocery store. For example, 600 grams of sirloin tip beef cost $9.15 in the 2009 basket, up from $4.61 in 2008, while the farmer’s share remained flat at $2.05, thus dropping from 44 to 20 per cent.

The KAP study’s results point to other issues as well, such as the length of distance between two “at-risk” groups, namely farmers and consumers, said David Northcott, executive co-ordinator of food bank Winnipeg Harvest.

Speaking at KAP’s news conference, Northcott noted a jump of about five per cent in the number of people using the food bank over the past seven to eight months. [email protected]

About the author

Editor, Daily News

Dave Bedard

Writer and editor. A Saskatchewan transplant in Winnipeg.

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