Farm retail margins and other mysteries - The Packer

Farm retail margins and other mysteries

08/13/2014 09:31:00 AM
Tom Karst

Tom KarstI got an e-mail the other day from a public radio station looking for some insight on produce pricing. I wasn’t able to participate in an “on-air” discussion of tomato pricing (duty calls with The Packer’s Midwest Produce Expo), but I provided a few alternative (and better qualified) sources I hope might work out.

All of that to say that I just noticed the U.S. Department of Agriculture Economic Research Service just released updated spreadsheets about the farm-retail price spread.

For apples, for example, the farm share of the retail price was 25% in 2011, up from 22% in 2010 and 21% in 2009.

For strawberries, the farm share of the retail prices was 41% in 2011, down from 45% last year but up from 37% in 2009.

On the vegetable side, the farm share of the tomato retail price was 27% in 2011, down from 34% in 2010 and 37% in 2009.

But it is difficult to draw any hard and fast conclusions about the direction of farm/retail margin based on a year or two.

The USDA summary of the farm-retail numbers rightly noted that volatility in farm prices can play a huge role in farm share.

And - yes about the mystical topic of produce pricing - a retail buyer described how it works to me at a reception the other night in Chicago. If he would only go “on air” with his candid comments!

Check out the USDA’s farm-retail margins at this link.



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