Survey reveals consumer thoughts about U.S. food system

Sustainability is a hot topic in agriculture lately, as consumers are bombarded with messaging about the price, safety and availability of food.

As food and agriculture coincide, sustainable agriculture is a movement interlocking the success of three concepts: farm profits, farm communities and eco-friendly farming practices.

The Center for Food Integrity (CFI) recently released results from its 2009 Consumer Trust Survey about sustainability. CFI is a nonprofit organization that promotes dialogue, advocates best practices, addresses consumer issues and serves as a resource for accurate, balanced information about the U.S. food system.

CFI member organizations represent each segment of the food chain, including farmers, ranchers, processors, government and companies that deliver food products under local, regional and global brand names.

The purpose of the survey was to better understand consumers’ decision-making processes in regard to food purchasing, since most consumers are largely uninformed, and to help build confidence in the American food system.

Survey respondents were asked a series of questions regarding their beliefs about the following stakeholders of the food system: farmers, restaurants, grocery stores and food companies.

Survey Highlights

• Consumers hold farmers most accountable for sustainability in the food system.
• Consumers hold restaurants least accountable for sustainability in the food system.
• Men are more trusting of the information that was presented than women.
• Consumers are willing to be educated about the food system.
• Consumers trust food more if it is made in the U.S.
• Food prices are not as great a concern for consumers as they were one year ago.
• Consumers do not consider organic food as healthy as they did two years ago.
• Consumers perceive farmers as most competent among industry groups and therefore, place the most trust and responsibility in them.

A Webinar presented by CFI about the survey, including survey questions, can be accessed at:

http://www.4shared.com/file/153522650/43682205/CFI_Consumer_Trust_Research_Webinar_--_Sustainability.html

As the results indicate, consumers’ trust in and expectations of farmers are great responsibilities to bear. Farmers are charged with creating and supplying an affordable, dependable food supply that meets sustainability standards.

Interestingly, respondents also believe that having shared values and ethics among industry members is more important than the groups truly demonstrating sustainability competence.

What conclusions do you draw from the survey results? What kinds of questions should the next survey include? How can farmers and other members of the food industry demonstrate their commitment to sustainability? Do farmers deserve more recognition for their role in the industry?

Plummeting Milk Prices

America’s 57,000 dairy farmers witnessed elevated milk prices in 2007 and 2008. But as we entered 2009, decreased export demand, costly herd upkeep and oversupply caused milk prices to drop rapidly.

"Call it globalization,” said Roger Hoskin, a dairy analyst at the U.S. Agriculture Department's Economic Research Service. “When the export market is strong, they do well; when the export market is weak, domestic use is not enough.”

Besides selling it by the gallon, milk is sold for national and international use in processing other dairy products such as butter, yogurt and ice cream. Remaining product is converted to powdered milk, cheese and whey.

American Agriculturist cites 2007 conventional milk prices at $20 per hundredweight while pricing today’s average at $11 per hundredweight. The average price for a gallon of milk has declined 14.7 percent in the past 12 months, from $3.87 to $3.32, according to figures from the U.S. Bureau of Labor Statistics’ Consumer Price Index. Dairy farmers are receiving 35 percent less than what they were paid last fall.

The health of commodity markets determines a dairy farmer’s dividends.

Unlike other farm sectors that can store excess product for future sale, dairy producers are forced to sell their product immediately.

Dairy operators are reducing herd sizes to decrease milk production and to save money on animal feed and care, and have also resorted to selling cows at fire-sale prices, or significantly lower-than-average market prices, to stay afloat. According to a USA Today article, there has been a 20 percent increase in cow slaughters from last year.

California, America’s No.1 dairy state producing $7 billion annually or one-fifth of the U.S.-milk supply, is receiving the blunt of the industry storm. California Gov. Arnold Schwarzenegger proclaimed June 2009 as “Real California Milk Month” in efforts to boost industry sales.

To assist a floundering market, the federal government is purchasing dairy products to normalize price levels and is allocating its purchases to national food banks and nutrition programs, as well as donation programs abroad.

The state of the U.S. economy isn’t helping matters. With increasing numbers of farmers in all commodities seeking loans, dairy farmers cannot depend on receiving financial assistance for security as in years past.

The National Milk Producers Federation (NMPF), a nationwide conglomerate of dairy farmers and cooperatives, is working to promote the demand of dairy consumption and the vitality of the American dairy industry.

How can the dairy industry reinvigorate interest in its products? Will milk prices stabilize if/when the global recession recovers? Should other farm industries be on the defense after witnessing the beef, pork and now dairy sectors experiencing a threatened existence?

High Prices a Problem for Corporations, Consumers Alike

Everyone from the CEOs of huge corporations to stay-at-home moms are feeling the squeeze of the high cost of living. Soaring food and fuel prices are leaving their mark in grocery stores, on the roads and in homes across the United States.

The U.S. Department of Agriculture recently estimated that food prices will climb 4.5 to 5.5 percent this year and another 4 to 5 percent in 2009. Many are scrambling to find new ways to survive in this volatile economy. The “trickle-down” effect has become obvious.

With the increased cost of living, many farmers are losing money with each chicken and cow they sell. Grain farmers are hurting from rising fertilizer and fuel prices as well. When those at the source of our food supply are hurting, the high cost of inputs are sure to be passed on to the consumer.

“It costs $1,000 to fill up some farm tractors every time they pull up to the diesel pump with an empty tank,” said Mark Schneidewind, Illinois Farm Bureau manager for Will County. In an Aug. 22 article in the Morris Daily Herald, he explained that anhydrous ammonia, a common fertilizer, has risen from $200 per ton to more than $1,000 in the past two years.

Like farmers, food manufacturers also must tighten their belts. Though often seen as responsible for hiking prices, companies like General Mills are suffering, too. According to an Aug. 8 Wall Street Journal article, to save dwindling profits, General Mills and other companies like Pilgrim’s Pride, Sara Lee and Tyson Foods have been forced to charge more for smaller boxes of cereal, cartons of ice cream and jars of mayonnaise.

The next place increased prices have a significant impact is in the grocery aisles and the wallets of families across the U.S. Already driving less, opting out of their usual activities and switching to more fuel-efficient cars, moms and dads are watching their food purchases closely. Even children at school can feel the effects of the market. Schools in many states are being forced to raise the price of all lunches, including their “low-cost” meals and are reducing the variety of foods they offer.

“We were so used to getting into the car and going places, trying new things,” said Jennine, a suburban New York mother of two. “I try to drive only as necessary so I can make a tank of gas stretch for two weeks. You have to think about how you do food shopping and where you are taking the kids.”

On the upside, makers of items like bicycles and wood-burning stoves are enjoying increased sales. Online and bulk shopping are also on the rise.

“High energy prices are forcing consumers and businesses to reconsider both short-term and long-term decisions, from where to go on vacation to where and how to organize product lines,” said Scott Horsley in his Aug. 13 NPR article. “Some of these changes will be long-lasting.”

The endless cycle of finger pointing is obviously not helping anyone solve the problem of higher prices. What is the solution? Are these market conditions here to stay? Let me know what you think.