Press Releases

FOR IMMEDIATE RELEASE                                    CONTACT:   Phillip Hayes
Monday, August 3, 2009                                                                   435-604-3113

PARK CITY, Utah—Anyone who’s been to the grocery store lately can tell you they’re paying more at the checkout line—seven percent more according to Bureau of Labor Statistics data from 2006 to 2008.

But America’s farmers and ethanol producers aren’t the culprits, Growth Energy CEO Tom Buis said today at the 26th International Sweetener Symposium. In fact, crop prices have dropped like a rock in recent months, he explained, but food manufacturers are still charging more to boost profits.  “We’re the scapegoats that were demonized in the press,” he said, “and honestly, we’re owed an apology by big food companies and Big Oil.”

Corn prices, for example, are trading at roughly $3 a bushel, down from $7.60 last year.  The same for wheat and soybean prices, which have also been cut in half.

“That’s not all that’s shrunk,” Buis told the group.  “The farmer’s share of the food dollar is also falling, and I didn’t think it could go much lower.”

Buis, who was the president of the National Farmers Union prior to joining Growth Energy, said corn farmers will only see $176 out of every truckload of Corn Flakes sold—about 4,200 boxes worth.  “It costs more than $500 just to get the cereal to the store,” he explained.

Such stark examples aren’t just isolated to corn, either, according to Luther Markwart of the American Sugarbeet Growers Association.

“The American Sugar Alliance released a study this week that showed the huge divide between the price grocery stores charge for sugar, and the price they pay sugar companies to deliver the sugar right to their front doors,” he said. “They’re charging almost double for literally stocking the sugar on the shelf.”

The Sugar Price Survey Markwart referenced also showed that the same is true for processed foods.  One popular 99-cent chocolate bar only has a penny’s worth of sugar in it, according to the study.

“Food manufacturers are spending less on sugar today than they were in 1980,” Markwart concluded. “I challenge you to find another segment of our economy that can make that claim.  No wonder food company profits continue to march upwards.”

The result for farmers both men said is a shrinking profit margin and a constant drive to improve efficiency through vertical integration and new technology—technology that gets more expensive every day.

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