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Since 2003, Farm Value Of Dairy Products Has Risen More Than Farm-To-Retail Spread

But Farm Value Share Of Retail Price Has Been Under 33% In Two Of The Last Three Years

Washington—Over the last decade, the farm value of dairy products has risen more than has the farm-to-retail price spread, according to figures recently released by USDA’s Economic Research Service (ERS).

The ERS data product “Price Spreads from Farm to Consumer” compares prices for food paid by consumers with prices received by farmers. For the milk and dairy product “basket,” the base period is 2003 (2003=100; that is, the retail cost, farm value and farm-to-retail spread are all 100 for that year).

The retail price index used in this data product is derived from data from the US Bureau of Labor Statistics (BLS).

Since 2003, the retail cost of dairy products increased only to 108 by 2006, then jumped to 116 in 2007 and 125 in 2008 before falling to 117 in 2009 and then rising each of the next three years, reaching 129 in 2012.

The farm value of milk and dairy products, which is based on prices farmers received for their milk, jumped from 100 in 2003 to 128 in 2004, then declined for two straight years, reaching 101 by 2006. It then jumped to 145 in both 2007 and 2008, fell to 101 in 2009, rose to 127 in 2010 and then 156 in 2011 before dropping back to 143 in 2012.

The farm-to-retail spread for the milk and dairy basket, which is defined as the spread between the farm value and the retail price (the spread represents charges for processing and marketing), fell to 99 in 2004, reached 111 in 2006, then fell back to 105 in 2007 when the farm value soared. The spread then rose to 118 in 2008 and 124 in 2009, when the farm ...More