Anyone who reaches for a gallon of milk these days might cringe—you are paying 73 cents more than you did in January 2020.
Pennsylvania farmers will tell you though, the all that extra money isn’t landing in their wallet.
To understand the cost of food… you have to know the players.
“$0.15 on average of every dollar is the farmer. The $0.85 of that dollar, there are other things,” said Agriculture Secretary Russell Redding.
When a farmer milks his cows at 4am on a Tuesday, that milk has a long path before it ends up in a bowl of cereal. It goes from the producer—the farmer—to a processor. With milk, that’s where it gets pasteurized. From the processor it might get sent to a manufacturer who bottles and labels the dairy, or...
“Sometimes they are used as ingredients. For processing, that’s what most food is needed for,” said Linlin Fan, an associate professor at PennState who researches agriculture economy. “From there, it’s about sending to the manufacturers, and then the manufacturers sending to wholesalers. Sometimes to big retailers.”
Fan says most of today’s high food prices come from inflation caused by COVID stimulus money flooding the economy.
“It's good, you know, in the short run to help people to deal with the pandemic and the emergencies,” said Fan. "But in the long run, it's just essentially too much money chasing too few good.”
Fan says labor shortages and the Ukraine/Russia war also still play a role.
As the cost of food stays on top of voter’s minds, top Democrats blame continued rising costs on ‘greedflation’, a term Sen. Bob Casey has used in his campaigning. Casey and others accuse corporations of raising prices while production costs are stagnant. Vice President Kamala Harris has even proposed a federal price-gouging ban on food and groceries as a solution.
While greedflation can play a role in costs, it is not the main cause for higher food prices right now.
As Pennsylvanian’s shop for food, one way to reconnect with the farm part of the supply chain is to buy local and go to farmers markets.
“Buying a Pennsylvania Preferred product, supporting the local business,” said Redding. “Because then you've got all those other chain components that are built in that $0.85 that may not be there.”