IARN — The Consumer Price Index (CPI) shows us the prices consumers are paying at the household level. The CPI has been on the rise for the past year and has reached a thirteen-year high. Households are spending a large percentage of their budget on food or eating in general. So how does this rise impact farmers who are the ones producing the food products?
Curt Covington is Senior Director of Institutional Lending at AgAmerica. He talks about the impact this rise could have on farmers. Covington says that the short answer is, “it depends.” It all comes down to which products we are talking about. However, what may surprise you is that beverages are at the top of the list and take up 6% of the household food budget. That is not factoring in milk.
Beef, poultry, and pork are seeing an increase in costs at the supermarket. According to Covington, it is about a 14% portion of the budget. Milk and Milk products make up about 4% of the food budget for consumers. COVID-19 and the pandemic impacted the food budget for consumers and the prices they pay at retailers. This means many consumers are looking to buy direct from the producers. While this has increased the most in fruits and vegetables, there is still an uptick in meats and dairy. This leads Covington to feel that farmer will weather this current situation.
For more on this story, including interview audio with AgAmerica’s Curt Covington, visit the Iowa Agribusiness Radio Network
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