Food companies keep prices high

It has always burned farmer's shirts to see what a tiny percentage they get out of a loaf of bread or box of corn flakes at the supermarket. A $3-$4 loaf of bread at retail returns 30-40 cents to the farmer who raised the wheat to make it.

The percentage is even less on corn flakes and other grain-based products. Most of the expense is in marketing costs--designing, making and printing the box it comes in, producing and buying the radio and TV ads to sell it, and paying salesmen to go to the retail outlets and beg shelf space, paying spiffs if you will, from which to sell it to the consumer.

Second in the expense list is the factory and the union-scale workers who manufacture the product. The non-farm ingredients are more expensive that what small amount of wheat, corn, oats, etc. the product may contain.

So it is in these economic times, with commodity prices dropping like a rock, food companies haven't dropped the price of corn flakes, bread or oatmeal a single penny. Corn, for instance, is down from a high of $7.50 a bushel to about $3.67 a bushel. There have been no price cuts in corn flakes.

With tight budget times for the average homemaker, cutting expenses in the food segment has proved difficult, because prices haven't gone down. You can eat lower on the food chain, but prices haven't dropped.

You can only imagine the budget of the farmer who raised the corn, seeing his return drop from $7.50 to $3.67. That's where times are suddenly real tough.