What’s in a grocery bill?Published 11:55am Wednesday, November 21, 2012
Today, the day before Thanksgiving, is probably one of the biggest shopping days of the year for grocery stores.
We all have to make that last minute trip to the grocery store to make sure we can have turkey, dressing and the rest of the fixings we have on Turkey Day.
And most of us rarely think about just how much does the food actually cost. I mean, we complain when we see the final bill and realize we’ve just spent $100 or $200 on groceries.
Some of us might think the farmer is just out there trying to gouge the consumer. The store just explains to us that they have to pass along those increased food costs to the consumer to continue to make a profit.
And when we see the prices of food continuing to rise, do we really know just how much of that money the farmer makes as profit?
Well, I can answer that question and it’s very little profit.
Last week at the Farm-City Banquet at Hartselle First United Methodist Church’s ministry center, Hal Lee showed us on average just much – or little depending on your perspective – the farmer makes on even just a small grocery bill.
We were given the store retail prices of certain items such as potatoes, peanuts, butter, eggs, flour, cornmeal, ribeye steaks, cheese and sausage and he asked us to estimate how much the farmer made on that item.
For the most part, my estimation was much higher than reality. I thought that for sure the farmer would get about 25 percent profit off of the $28 grocery bill.
Nope. I was wrong.
The farmer actually made a little more than $4.
In fact, the ribeye steaks, which cost around $11, only helped make the farmer about $1 on that entire package.
The reason why that profit margin is so small is that many farm products have to be processed in some form or fashion. On a $3 bag of flour or cornmeal, the farmer only averages about 25 cents in profit. However, he makes a little more on butter and eggs because very little processing is needed.
So when we sit down for the Thanksgiving meal, I know I’ll think about it differently when we ask the Lord to “bless this food to the nourishment of our bodies and the hands that prepared it.” That represents a lot more people than we realize.
Brent Maze is the managing editor of the Hartselle Enquirer.