Food prices might not go a lot higher over the next little while, but the longer-term forecast is gloomy.
Last week, the United Nations Food and Agriculture Organization (FAO) announced that in August, the world food price index fell for the fifth month in a row. The prospect of grain exports resuming from Ukrainian ports added some relief to the global price outlook.
You’d think that good news would be greeted with optimism.
But in making the announcement, the FAO warned that it’s doubtful the overall price situation will improve significantly. It specifically cited rising on-farm expenses as a huge problem.In a news release, FAO chief economist Maximo Torero noted “many uncertainties remain, including high fertilizer prices that can impact future production prospects and farmers’ livelihoods, a bleak global economic outlook, and currency movements, all of which pose serious strains for global food security.”
- Advertisement -
FAO recognizes farmers need fertilizer, and it’s costly. A new farm earning forecast for the United States Department of Agriculture says producers’ total fertilizer bill there is expected to hit $45 billion this year, up from $29.5 billion in 2021. Those costs are part of an overall leap in farmers’ production expenses, which are forecast to be up this year by $66.2 billion. That’s almost 18 per cent more than last year.
Canadian figures are expected to be similar. Globally, almost everything costs farmers more – including energy – and those costs are ultimately passed down the line to processors, manufacturers, retailers and consumers.
Despite the public’s trust in farmers, fingers are bound to point their way. In its earnings forecast, the USDA estimates that net cash farm income will reach its highest level in a decade, as a result of skyrocketing prices for commodities. Net cash farm income is forecast at $168.5 billion in 2022 – an increase of $22.1 billion over 2021, and appreciably more than the $136 billion the USDA predicted in February.
Stories will surface like they always do when farm income rises, from camps claiming farmers are getting rich. Farmers are easy targets. No one else along the production chain is as present. Think about to whom, for example, at a food company you direct your ire. Some “info@” address on a website? Same with grocery stores. Employees on the floor take it on the chin for decisions made by nameless executives and administrators who seldom if ever come in contact with the public.
Farmers, though, are out there. When you drive by their business, a.k.a. their farm, you know it. And so do they. They’re sensitive to being made scapegoats and have the negative-trending mental health results to show it.
The farm community needs to get out in front of this potential punch-up. Consumers understand how higher prices in general have affected their lives. They can relate to the cost of exorbitantly priced fertilizer. But they need to hear the full story, and they need to hear it from farmers.