Posted: 12.09.2010
The issue of transparency in the food chain was the focus of the final USDA-DOJ workshop in Washington, D.C. on Wednesday - and a Wisconsin dairy leader decided it was important enough to travel.
David Cooper, General Manager of Family Dairies USA spoke with Pam Jahnke as he was catching an airplane back to Madison from the workshop. Cooper estimated the crowd at over 450 to start the day long discussion on margins in food production. Cooper said there seemed to be agreement on the need for transparency in the market place - but definitions on transparency differ.
"Well there's certainly a lot of different situations we have to understand," Cooper told Jahnke. "When you see prices rise in the store - we understand that costs have gone up for farmers. When prices go down on the farm though, we don't often see that happen on the retail level. There's definitely a disparity there in the percentage of margin that some of these organizations came make - sometimes at the expense of the grower." Cooper said buying local may be one way to get a better handle on that relationship - and just understanding what retailers need and making it available in the proper amounts may be a solution.
Cooper said despite all the dialog - there's still a long way to go in common understanding the the food chain. "One thing I heard today was that the retail sector works on very thin margins, anywhere from 1-2 percent margins - and that the beef showcase is usually a loss leader for them. That's hard for us to understand. " Cooper said he was also irritated by testimony offered by one food retailer. "He said there is transparency in the market place - and proceeded to explain how his smart phone could read bar codes and allowed him to price shop many different locations for the best deals." Cooper continued, "Mainstream America doesn't have smart phones with bar codes to check out those prices - so most of our consumers don't have that option for transparency. Clearly the growers we represent aren't seeing that kind of transparency or we wouldn't experience one load of cheese that can change the industry." Cooper was refering to a 14 cent drop that butter took near Thanksgiving - all on one trade - one company's action.
U.S. Ag Secretary, Tom Vilsack, reminded the audience on Wednesday that in 1980 - 50 percent of the retail value of pork made it back to the farmer. Last year less then 23 percent went back. The same trend was noted in beef. In 1980 - 62 percent of the retail food dollar consumers spent ended up in the farmers hand - last year that number dropped to below 43 percent.
Meanwhile, Secretary Vilsack said statistics show retailers percentages went up. He said in 2009, almost 62 percent of the food dollar went to the retailer for pork - and 49 percent on beef.
USDA and DOJ are continuing to accept comments through early 2011.
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