(WATCH) Farm Inflation

(Originally aired: Oct. 16, 2022)

One recent poll finds 92% of Americans consider inflation — rising prices — an important issue in the upcoming midterm elections, outpacing other hot-button issues like abortion and crime. Today, Scott Thuman takes us to the farm to find out how inflation there translates to what you pay at the grocery store.

The following is a transcript of a report from “Full Measure with Sharyl Attkisson.” Watch the video by clicking the link at the end of the page.

Outside Bethlehem, Pennsylvania, Dennis Koehler takes a long at his crop. His family has been farming in this area since 1789.

At 1,500 acres, it’s a small operation, but Koehler’s committed to his farm. This year though, it’s been tougher than most.

Scott: Do you think we’re in a good place, a bad place? How is it for you?

Dennis Koehler: I think we’re in an unsure place right now. You don’t have control of a lot of what’s happening, and that makes this a very hard thing. One thing we have to remember is, as a whole, farming is typically a tight-budget setup. The money that gets left behind on the plate at the end of the day isn’t a lot.

And what’s eating away at the budget on this farm and countless others across the country: inflation and supply problems.

Koehler is paying between 50% and 200% more for fertilizer than he did just last year — providing he can get his hands on it.

Koehler: February, March, April, we were hearing a lot of issues about whether or not there was going to be enough fertilizer to go around. Prices started really climbing. There were situations where they were telling us that we might not be able to get it when we needed it.

Getting what they need isn’t always about seed or machinery. At the Leelanau Fruit Company in Michigan, it’s workers that are hard to find. Glenn Lacrosse has been growing cherries for 50 years and he’s been the boss here for nearly three decades.

Glenn Lacrosse: Orchards take a lot of labor, and we’ve certainly, for several years now, been short on labor. And that really limits us to be able to contribute to bare shelves at the store.

So he’s paying $23 an hour to attract workers. That’s seven times higher than what countries like Turkey are paying. So it costs a lot more just to keep the line moving. Inflation too, taking a toll.

Scott: But I mean you were telling me — which made me raise an eyebrow — you were talking about over your shoulder is a lot of sugar. What are you paying for sugar right now?

Lacrosse: We’re paying about 70 cents a pound for sugar. And I’d say three years ago, we were probably paying in the 22-cent range.

Scott: So sugar has gone up three times. It’s tripled.

Lacrosse: Yeah, yeah.

The skyrocketing costs of packaging and transportation adding up as well.

While the U.S. inflation rate has hovered around 8%, farmers’ costs have risen even higher. Some experts calculate it’s costing farmers about 40% more to grow a crop this year compared to two years ago.

Roger Cryan is the chief economist at the American Farm Bureau.

Roger Cryan: Well farmers are facing inflation in things like fuel and fertilizer in particular. Fuel prices doubled, and fertilizer prices tripled last year as the economy heated up after Covid. Prices that are well above inflation that everyone else is facing. So the bottom line for farmers is it has been a lot tougher than you would expect.

And the pain, Koehler warns, to be felt for a long time. Well beyond when the economy bounces back. Americans will still pay more for what farmers are putting on the table now.

Koehler: In our case, we feed a lot of cattle, and, in the case of steer, it takes 18 to 24 months to finish a steer on feed. So potentially, we might not see the total cost effect on beef for maybe a year to two years from now.

Scott: So we can expect to keep paying higher prices.

Koehler: Yeah. I think unless we see some sort of crash in the economy that causes the inflation to go down, that the currency is devalued — unless we see that, it’s a given that it has to keep going up.

For American farmers, the only choice — to keep working the land, and hope for brighter days ahead.

Sharyl: I think I might know the answer, but are the farmers making more then?

Scott: Well, in general, no. While we’re paying a lot more at the grocery store these days, farmers’ costs have risen even faster, and many of them are really just trying to hang on.

Watch story here.

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