Possible Gouging By Food Processors
The American Corn Growers Association is warning consumers to be on the alert for price gouging by food processing companies following recent statements claiming that grain prices will increase food prices.
"With the passage of the1996 farm bill ten years ago, which eliminated the minimum pricing mechanisms for most of the major crops, the prices paid to farmers for corn and other grains fell by 40 percent," said Keith Bolin, president of ACGA. "Recent crop and price projections by the U.S. Department of Agriculture indicate a modest recovery in prices paid to grain farmers. ACGA wants to make sure that consumers are not victimized by some in the food processing industry who may over price their products due to the modest recovery in grain prices."
The October 12 World Agricultural Supply and Demand Estimates report, which provides USDA's comprehensive forecasts of supply and demand for major U.S. and global crops and U.S. livestock, projected a modest 25-cent increase in the price paid to farmers for a bushel for corn next year.
"We need to make sure the facts are known about relationship of the price of corn paid to farmers and the price of corn flakes paid by consumers," added Bolin. " A 25-cent increase for a bushel of corn (56 pounds) is less than one half of one cent per pound. That means that the farmer's share of the increase to the consumer for a box of corn flakes is less than a penny. If consumers are forced to pay more than a penny increase, we would say that price gouging has occurred."
The American Corn Growers Association represents 14,000 members in 35 states. Join ACGA or donate to help America's farm families at www.acga.org.