With the drought we have been experiencing across the midwest a lot of questions I have been getting lately is how that is going to affect the food prices for the next year.
This diagram shows a wonderful representation of where the money from $1.00 US Food Dollar goes. For the last 60 years the amount of money that farmers and ranchers get from the food dollar has significantly decreased. In 1950 it was $.40, today it is less than $.12
One thing to keep in mind, regardless of where food prices go, is that as American we have one of the most affordable food supplies in the world. We spend around 10% of our income on food, versus 18 to 25% around the world.