Polish Up Your Talking Points

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Americans have spent less than 10 percent of their disposable income on food for many years now. That’s about to change. Food prices are on the rise and there will be new records set for some, actually many goods, this year. Meat, dairy and poultry prices are among the products on pace to set records.

While the general inflation rate was nearly zero in 2010, food and fuel presents another story. Predictions for 2011 food inflation range from 3 percent to 6 percent, with some estimates in recent days pushing into the double digits.

This will come at a time when gasoline and energy prices also are on the rise—oil is projected to reach beyond $100 per barrel.

While economists are already warning about the cooling effect that these rising prices could have on the U.S. and global economic recovery, the question for farmers is how will consumers respond? I don’t mean, how will they respond in terms of purchases—although that is a worthy concern. Rather, how will they respond in their perception of you? Remember, there’s already a lack of understanding and trust toward today’s farming and food system.

Consumers will see higher prices in the supermarket and hear about record commodity prices and will perceive you as riding waves of money. After all, that sort of finger pointing even occurs within agriculture. I’ve already heard rumblings of that mindset as food-animal producers point to crop growers as being flush with cash due to skyrocketing grain prices. But, add up a corn producer’s production costs, with rising fertilizer, seed and land rent prices, just to name a few, and their bottomline isn’t as richly black as it first appears.

“Dairy farmers are having it harder, while pork producers will see record prices…” was one comment that I recently heard. Yes, hog prices may set a record this year, but so will those producers’ production costs. In the end, per-hog profits will be modest and could slip away altogether.

As has been driven home frequently and severely during the past few years, a producer’s risk-management strategies, regardless of the commodity, will determine who makes a profit and how much. Of course, those kinds of details won’t filter down to consumers or the news media.

News stories are already outlining this year’s higher food prices. In recent days, I’ve seen coverage on ABC, NBC, cable news and a National Public Radio business show. Still, nothing drives the point home like actually feeling it in your wallet, and that is yet to come in a significant way. I believe consumers are in for some sticker shock, and they’ll wonder what the heck has happened.

They will point to “big, greedy, modern farmers.” Never mind that globally, there are 1 billion more people to feed than in the 1990s, as well as more who’ve upgraded their previous diets.

My point is with rising food costs on the horizon, consumers will again look at farmers with jaundiced view. So, polish up your talking points about the reality of farming, finances and food production today and be prepared to explain the truth to consumers in a calm, thoughtful way.

Food activist and author Michael Pollan (Food Rules, Omnivores Dilemma, In Defense of Food), has been arguing for some time that food in the United States is too cheap. Well, he and his devotees will get a taste of what that’s like, as we enter a period of adjusting to the new “normal.”

By Marlys Miller, editor Pork magazine



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