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Originally Posted by Berger_4_
True dat yo....actually, it's very very similar to the music industry. Lots and lots of overhead (think at least a quarter of a million dollar loan every year for seed, fertilizer, spray, etc...not to mention paying for equipment that costs nearly that much if not more new) before you even get the end product into the ground. so every year, you are down 250,000 bucks before you even begin work. kinda scary actually. and then there is the low cost of grain...whats wheat at now? 4 or so dollars a bushel? now how many bushels of wheat does it take to make a loaf of bread? what does that loaf of bread sell for? but it is kind of a cool feeling to know that you are literally feeding the world even if you are making not a helluva lot of money
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1. This should put it into perspective for the average Joe consumer. The BEST price my father ever got for wheat was $4 a bushel. That was back in the 1960's. Yup, 50 years ago!!! A
nd what is the price per bushel of wheat now? Sigh, about the same. Does that help all of you to see why farmers are in such dire straits? And that is not all. It might be $4 per bushel right now, but for like 20 years or more, it has been half that. How has the price of machinery for farmers fared in that time span? It has skyrocketed. We are talking a couple of hundred grand for a tractor, same for a combine, etc. What has the price of fuel done in that same time span? Same as the price of machinery, it has skyrocketed!!!
Sure, farmers have diversified and grow many more products now than just wheat, but along with the diversification comes the cost of new machinery to harvest the new product. And then what has happened to those farmers of mixed operations? In other words, they grow grain crops as well as cattle? Well I think you know the answer to that since the BSE crisis in cattle. Farmers are being hit hard from every corner. We should salute most of them for their ongoing efforts.
2. Now to put the whole thing into further perspective. As I mentioned, the best price my father ever got for the wheat he sold was $4 per bushel and that was 50 years ago. Well, back then, bread was maybe 40 cents per loaf. Ask yourself, what is the price of bread today? Oh maybe $2 and up? Is the farmer getting anymore for his product? Nope, so when you buy that loaf of bread, where is your money going? It is going to everyone who touches that wheat once it leaves the farmer's hands. And you can be sure that each and every one of them over the last 50 years has seen the price for their service rise. They all have except for the farmer. Does something smell wrong in the state of Denmark?
edit: I forgot to mention that 1 bushel of wheat is around 56 pounds, so say around 25 kg. A baker can make at least 40 loaves of bread from that. So then, the farmer is paid a maximum of $4 for his bushel of wheat right now, and that will equate to at least 40 loaves of bread at around $2 and up. So around $80 minimum is generated from that loaf of wheat. Farmers portion is 5%.
50 years ago, the farmer got the same price, $4 per bushel of wheat. Bread then was around 40 cents per loaf and extrapolating, that comes to around $16. The farmer now got around 25% of the chain of income. See why the farmer could survive back then? and has one hell of a time keeping the family farm now?