While the current market of $3/pound ground beef and $1.50 cartons of eggs means that families can dine cheaper,
these family windfalls have grocery stores and farmers panicking. Experts are anticipating that this drop in agricultural productivity will reach its worst point since 1960. While this is great for anyone looking to work on a culinary bucket list, it could leave many farmers and vendors scrambling to stay alive in the market.
While the annual cost to feed a person has dropped by nearly 2%, this reduced cost has impacts dairy, meat and grains by an even greater margin: Corn has dropped to less than half its cost per-bushel in four months, wheat is at a notable low of slightly above 40% of its peak worth and the value of soy has dropped to nearly half of what it used to fetch. Elsewhere, dairy farmers have had to discard excess milk with the government providing a $20 million bailout to store the surplus. At least one corn farmer has remarked that 2016 is looking to be his least profitable in 20 years and the reduced prices of his livelihood imperil the very industry.
When changes perspective from America’s farmers to most of the country’s grocery stores, most of these vendors have reported mediocre gains in their quarterly earnings and attribute those meager gains to a deflation of product. Indeed, the comments about “deflation” can be attributed to an incredibly bountiful yield of crops that has greatly impacted the concept of scarcity. Another factor in the value of grain products is that the price of corn has recently changed to have a relationship with gas prices, shifting to reflect the value of ethanol instead of traditional fossil fuels.
Only a handful of industry positives emerge from this news: the increased value of fruit, mostly driven by California’s drought negatively affecting its fields and orchards; the increased profits and stock value of deflation-resistant Walmart; and an opportunity for the meat industry to rebound into profitability as the price of cattle feed and chicken feed plummets in value. The president of the National Turkey Federation remarked that the cost of grain accounts for nearly three-quarters of the total cost to bringing a turkey to the dinner table.