Why are farm market prices so high?

When we look at what farmers are charging for fresh farm foods, the prices are amazing.  The average retail price of whole milk in November 2018 was $3.27.  Yet, when we look at the prices of “raw milk”, we see farmers charging over $8.00 per gallon!  Likewise, the average retail cost of “cage free” eggs is $2.42 per dozen, yet we’ll see farmers charging $6.00 per dozen for “free range eggs”.

At the same time, we’ll hear farmers claiming that their methods of raising “grass fed” cows or “free range” hens are simpler and healthier than the modern industrial farm methods being used to produce supermarket eggs and milk.

Shouldn’t fresh farm food be…cheaper, or at least comparable to supermarket prices?  Why are farm market prices so high?

I believe farm market prices are high because farmers are charging customers for their farms rather than their farm products, which isn’t fair.

When someone buys a farm, they gain an asset in their farm and they usually take on a liability to pay for it–a mortgage.  With that liability comes the expense of interest.  Add to that property taxes and so on, and just owning the land for a farm is expensive.

That’s none of the milk or egg customers’ business, though.  That’s the price for the privilege to farm.

Add to that farm land buildings and livestock and the costs multiply again.

That’s none of the milk or egg customers’ business, though.  That’s the price for the privilege to farm.

What customers should pay for is the cost of the product they are buying–not the price of the land and business opportunities the farmer is creating for himself.  My children are inheriting my farm, not my customers, and that’s why my wife and children help with the family work to pay for the farm–but my customers don’t.  All they get are the products they buy, and that’s all they should be paying for.  If farmers are honest about their love of farming, they should be eager to pay for the opportunity and have other means of doing so.

We, for example, own a publishing business and have used the profits of our publishing business to purchase the privilege of farming.  Our daily work in the office pays the mortgages that allow us to own a farm.  We are happy to pay those costs because we actually believe that the products we sell to others are valuable to us.  We are not selling eggs so that we can afford to own a farm.  We are building a farm to provide our family with access to healthy, affordable food and are sharing the abundance that God gives us with our neighbors at fair prices.  After all, we have to wash the milk buckets whether we milk 2 cows or 12 cows, so it’s not that much more work to collect milk for others if we’re already doing it.

Farmers, however, are taking the costs of their land, facilities, livestock, and much more, and passing it on to the customers buying their milk, eggs, meat and vegetables and this is simply not fair.  Customers are not buying a share of the farm, just its produce.  They should, therefore, only be paying the costs of that produce–and it doesn’t cost a cow $8 to produce a gallon of raw milk.

On another level, farming is most efficient when operated by a family.  If a farmer has no family to help with the farm, or raises his family to leave the farm, then he needs to pay $8 per hour every time he needs a hand, and that cost is passed on to the customer.  On a family farm like ours, the family works together and labor costs are minimized.  The children enjoy the fruits of the farm, life in the country, and many other benefits in exchange for daily farm help.  My older children have been offered jobs because they were raised working on the farm and “know how to work”.

When we ask customers to pay the cost of the produce they’re actually buying, those prices, by the goodness of God, are very low.  God is amazingly generous to us in nature and makes the healthy foods we eat available at very low costs.  We need very little food to live healthily and that food can be obtained quite easily today.

Customers often don’t understand the costs and are misled by dishonest marketing talk about “natural” foods.  If farmers were pressed for answers about why free range eggs should cost more than twice as much as supermarket eggs, they will not have good answers.  If farmers were asked to explain why milk from “grass fed” cows costs more than cows fed grass and expensive grains, they won’t have answers.  It doesn’t cost more to produce “grass fed” milk and it doesn’t cost more to produce “free-range” eggs.   It, likewise, shouldn’t cost more.

If customers add demands on the farmers, such as insisting on certified organic production methods, or exclusive use of non-GMO feeds and so on, then there will be some necessary price increases, but still, those increases should be limited to the costs of the preparation of those products, not the costs of owning the farm or farm business.

Most importantly, if we wish to claim that God is the source of the goodness we enjoy from the farm, is it right that we should bottle it up and make it available only to the highest bidders?  This is the opposite of what true faith would lead us to do.  Our family profits by gaining our own fresh milk, eggs, meat and produce from the farm–not by exchanging it all for cash.  What’s produced in excess of our needs should be shared at a fair price with our neighbors.  That’s the real duty of a farmer, after all, to “work that you may share” (Ephesians 4:28).

I believe that farm produce prices can and should be much lower than it is fashionable to sell them today.  I intend to make them available affordably here at Michael Family Farm.

God bless,

Bill Michael, Owner
Michael Family Farm

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