Howdy, all--
I'm responding to the original question that David Yudkin posed:
>Today in a meeting with Congressman Earl Blumenaur about farming and free
>trade, I said that farmers get 5¢ for raising the wheat that goes into a box
>of Wheaties while Tiger Woods gets 10¢. It really stopped the congressman, he
>challenged me as to were I got that fact. I thought it came from sanet though
>I couldn't find it in the archives. Has anyone else heard this figure and
>know were it came from?
I can't locate anything like that. But here are some statistics from
the USDA 1998 /Agriculture Fact Book/ that are related to this
question.
Check out this page of the fact book:
http://www.usda.gov/news/pubs/fbook98/ch1d.htm
It details the Farm-to-Retail Price Spread for various commodity
types. A table shows "Farm value as a percentage of retail price for
domestically produced foods, 1987 and 1997."
In 1997 the farm value, or payment for the raw product, averaged 23
percent of the retail cost (23 cents on the dollar), with the other
77 percent (the farm-retail price spread) covering
beyond-the-farmgate economic activity.
However there is much variation in different farm commodities. In the
table, it shows farm value of cereal and bakery goods standing at 7
percent in 1997. Compared to, for instance, 37 percent for meats and
21 percent for produce and fats and oils. (Side note: this tells you
something about why Americans are leaning toward the obese, when fat
farmers make more than grain farmers...but I digress. :^) Thus you
can see how much diversity the averaged figure of 23 cents on the
dollar obscures.
This doesn't answer David's question directly. But one can
extrapolate from the above figures that for a $3.00 box of breakfast
cereal product, with a 7 percent farm-retail price spread,
approximately 21 cents of the consumer price is going directly to
"the farmer."
Advertising and "other costs" total 6 cents on the dollar, as per the
dollar cost breakdown appearing here:
http://www.usda.gov/news/pubs/fbook98/ch1b.htm
Having said all this, I think David's example can put these issues
into context in a clear and concrete way for consumers. And we need
to dig up solid data to support such wonderfully teachable examples.
It would be intriguing to learn more about what the product promotion
fees are that someone like Tiger Woods in fact receives. There's an
interesting project for an enterprising student.
peace
mish
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Michele Gale-Sinex
Home office: 415-504-6474 (504-MISH)
Home office fax: Same as above, phone first for enabling
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Don't forget that most men would rather protect the possibility of
becoming rich than face the reality of being poor. --John Dickinson
(in the musical /1776/)
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