When I talk to people from the city, often, they think I’m very wealthy. The conversation is almost always the same once I tell them that’s far from the truth, “You have so much land, farm equipment and animals, how can you not be rich?”
For each dollar consumers spend on food, only 7.8 cents go to farmers — a record low that reflects shifts in how Americans eat, according to the Department of Agriculture.
Yes, the cost of food is going up in stores, but we aren’t seeing any of it. When you see the cost of meat, or vegetables, or your favorite fruit, how much of what you are paying gets to us, the farmer? Let’s look it at.
Cents on the Dollar
On average, farmers and ranchers receive 15 cents of every dollar spent on food. The rest of that money (85 cents if you’re doing the math) goes to other areas of food retail like production and processing, marketing, and transportation and distribution.
That amount varies greatly depending on the type of food*. Take wheat products, for example:
- For one pound of flour (calculated from the cost of a five-pound bag) retailing at 88 cents, farmers receive 39 cents.
- For one pound of bread retailing at $1.90, farmers receive 11 cents.
- For one pound of cereal retailing at $2.66, farmers receive 5 cents.
Some examples for meat include:
- For one pound of top sirloin steak retailing at $10.49, ranchers receive $1.90.
- For one pound of boneless ham retailing at $4.99, farmers receive 64 cents.
- For one pound of bacon retailing at $6.03, farmers receive 64 cents.
And when we look at beverages, we see:
- For one gallon of fat free milk retailing at $3.89, dairy farmers receive $1.78.
- For one two-liter bottle of soda retailing at $1.49, farmers receive 5 cents.
- For one six-pack of beer retailing at $10.99, farmers receive 4 cents.
* Prices calculated from data provided by the National Farmers Union.
You can see the more processing required, the smaller the percentage farmers receive.
Salary
How about in terms of an annual salary? How does the information above translate into buying power for a farm family?
It’s very difficult to come up with a single, accurate figure. Like with many jobs, personal income for farmers varies with geography and market demand. Farmers also have to contend with fluctuating prices for their crops, cattle and other products, as well as the cost of inputs such as tractors and combines — which can cost $300,000 to $500,000 — fertilizers and pesticides. (When farmers say they don’t drench crops in chemicals, they mean it! They only use what they absolutely must to keep costs down and food safe.)
However, some information from national and state sources provides a general idea of what farmers make each year.
In 2018, the median total household income for farming households in the United States was $72,481. However, that number includes both farm and non-farm income. Many, if not most, farm families are dual income with a family member who works off the farm. That additional income is included in the median total above.
According to salary data for farmers, ranchers and other agricultural managers from May 2019, the average salary is $60,000 a year. In contrast, they make a average salary of $38,060 to $56,655, with half getting lower salaries and half being paid more. The lower 10 percent of these farm professionals make less than $35,020, and the top 10 percent receive earnings of more than $126,070. The average farmer salary varies depending on how well the crops do and changes in operational costs for farmers.
In Texas, the salary range for a farmer runs $37,374 to $55,634. Sadly, I’m not even going to see the low end of that salary range for a few year.
However, about 63 percent of that income came from subsidies and crop insurance designed to help farms stay afloat during times of crisis such as flooding, drought and even trade wars.
Whether we consume food straight from the farm, or buy more processed items, we couldn’t live without the hard work of our nation’s farmers and ranchers. One farm in the United States feeds 166 people per year. There’s a good reason we should thank a farmer every day.
Additional links:
Farming and Farm Income data from the USDA Economic Research Service (opens in new tab)
Price Spreads from Farm to Consumer (opens in new tab)
