In the past several years, farm costs have continued to rise while producer shares of the final product have failed to follow suit, holding relatively steady during the last 15 years, according to USDA's Economic Research Service (ERS). That changed somewhat this past year.
In August, the ERS released 2013's farm value shares that measure the percentage of the retail price of products purchased in stores that goes to farmers. The numbers released showed dairy faired well in 2013, seeing growth across the board, with all dairy products averaging a farm share of 33 percent of the retail costs, up from 31 percent in 2012. Fluid milk led the way boasting 54 percent of retail price, up from 50 percent in 2012 and at the highest level since 2000.
At the other end of the spectrum, the farm value share of ice cream was only 16 percent, which was still a 1 percent increase from 2012. The lower farm share of ice cream is linked to the nondairy ingredients and further processing of the product. Cheddar cheese landed in the middle with a modest gain of 2 percent over its 2012 farm share, registering in at 32 percent of the retail dollar going to dairy producers.
Dairy's share of the returns from retail sales remains average compared to other food sectors, but there remains room for producer concern as the averages have consistently fluctuated between 24 and 35 percent since 2000. Failure to grow this number means more producers trying to meet costs with a smaller share of the final sale price.
