- Thread starter Crackerjack
- Start date
Dave Salway
Member
These may be gross profit but the real interesting
figure would be the NET profit .
figure would be the NET profit .
Bruce from Can.
Well-known Member
- Location
- Woodville, Ontario, Canada
Id say it is very close.
Moonlite37
Well-known Member
It would be nice if a 200 pound hog made 200 pounds of ham and bacon. Probably about right.
john in la
Well-known Member
Sometimes a farmer is their own worse enemy.
The price of corn sky rockets today so what does a farmer do.
Plants acre after acre of corn next year and no beans creating a over flow of corn and a shortage of beans so the price of corn goes down and beans goes up.
So the next year the farmer plants acre after acre of beans and no corn.
Same thing with cows.
Price of beef goes way up so now everyone wants in on the action; not once thinking that it will take 2 years for that cow you buy today to have a calf; and by then the price will be down because everybody wanted in.
I sometimes wonder if farmers ever heard the phrase "buy low sell high"
The price of corn sky rockets today so what does a farmer do.
Plants acre after acre of corn next year and no beans creating a over flow of corn and a shortage of beans so the price of corn goes down and beans goes up.
So the next year the farmer plants acre after acre of beans and no corn.
Same thing with cows.
Price of beef goes way up so now everyone wants in on the action; not once thinking that it will take 2 years for that cow you buy today to have a calf; and by then the price will be down because everybody wanted in.
I sometimes wonder if farmers ever heard the phrase "buy low sell high"
Goose
Well-known Member
Sounds about right.
All farmers do is supply the raw material and deliver it to a grain elevator. Someone else bears the cost of transportation, processing into a marketable product, the cost of needed additional ingredients, adhering to all the government regulations, packaging, delivery to a retailer, the risk of having excess/outdated merchandise on a shelf and the financial risk involved with all of the additional investments involved.
All farmers do is supply the raw material and deliver it to a grain elevator. Someone else bears the cost of transportation, processing into a marketable product, the cost of needed additional ingredients, adhering to all the government regulations, packaging, delivery to a retailer, the risk of having excess/outdated merchandise on a shelf and the financial risk involved with all of the additional investments involved.
Dick it is the processing/delivery that make the highest margin in the food chain. I have a friend that owns grocery stores he runs on a 3-4% average profit margin. He says Walmart is at 2-3% margin. It is a high volume low margin business at the unprepared food sales level. He told me the deli makes the majority of his profit. If a shopper buys $200 of regular groceries and a $20 bucket of cooked chicken to take home he makes more on the chicken than all of the other stuff. Gas stations are the same way. They make little on the gas itself but if you buy a 12 pack of beer the beer makes them more than a fill up on gas.
It would be interesting to analyze/compare the time the farmer invests in getting his product ready for market, as opposed to the time each of the successive players in the chain invest in their particular function. Might do the same type analysis with the "financial risk" factor. Having spent my youth in a dairy farm, I never complain about the price of milk, but I do wonder sometimes how much of that shelf price the farmer gets.
Indiana Ken
Well-known Member
I am confused:
The total retail value for the 15 items = $62.82. The total value to the farmer for the 15 items = $12.19.
$12.19 divided by $62.82 = $0.194. This would be 19.4 cents to the farmer from each retail dollar, instead of 15.8 cents. What am I missing?
To me: If I look at the numbers for cereal, bacon and beer; I conclude, if the price increases in the super market - don't blame a farmer. If I look at the numbers for steak, eggs, milk and carrots; I see a much closer link to the farm price and super market price.
The bottom line is more about does the farmer receive fair payment for his/her work and risk. This data does not address that question, IMO.
Pair-a-dice farm
Well-known Member
Years ago I worked at a name brand cereal plant. At that time a box retailed for $3. They broke it down as raw materials $.25, manufacturing and labor $.75. Advertising $.25, shipping and retail costs $.25. Government regulation and permits(EPA, FDA, OSHA, etc) $1.50.
Blackhole49
Well-known Member
- Location
- White Lake MI
Where's the profit? Or do the major cereal manufacturers go in planning on loosing money?
Bruce from Can.
Well-known Member
- Location
- Woodville, Ontario, Canada
Not much processing with a egg Goose, and whole milk only needs to be pasteurized , and packaged ,not skimmed. Some real good profit taking in these two products .
Those figures seemed high for the farmers share. I had always heard that 1 slice of a loaf of bread was the farmers but today that would probably be a sandwich loaf. On the cereal, the wrapping cost was twice what the farmer got.
It is like I said lately, with corn and beans half price, machinery and imputs should be half price. BUT the good years are gone for another 10-20 years like always. It is back to hand to mouth.
It is like I said lately, with corn and beans half price, machinery and imputs should be half price. BUT the good years are gone for another 10-20 years like always. It is back to hand to mouth.
Pete in MD
Well-known Member
- Location
- Central Maryland
Ken, you Are a little confused. The farmer gets $12.19 out of the final $62.82 or 19.4% of the final value, not $0.194. So 19.4% of $62.82 is $12.19
The Dukester
Well-known Member
Actually those prices seem a little high compared to what I buy at the local Kroger store....nothing new for a union to exaggerate....Anyhow I know the farmer receives a very small amount of that selling price. Sad, but it's kinda their own fault, they won't organize strong enough to be able to do much about it. Too darned independent I guess.....
Pair-a-dice farm
Well-known Member
That was 20 years ago and I may be off a couple of cents but not much. When you are producing a half million boxes a day, just a few cents add up.
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