In 1911, a bushel of wheat cost $1.
Today, that $1 is worth $23.82.
Today, a bushel of wheat costs $9.28.
Is there a problem? Yield has gone up, so farmers get more bushels per acre than in 1911. And farmers own more acres than in 1911 - average farm size grew from 297 acres to 1450 acres.
So how is it that Canadian farm net income from the market was near zero, and often negative over the past couple of decades?
Here's a clue: only 5 % of the consumer dollar goes back to the grain farmer. "Using his farm in East Selkirk, Man., as an example, [KAP president] Chorney said he would receive $90,000 if he grew 300 acres of wheat that yielded 50 bushels per acre. However, the bread, cereals and other products from his wheat would generate $1.8 million in sales for grocery stores."
Where does that 95% go? Transportation, packaging, advertising, retail and storage costs like rent and business taxes, fuels and electricity, and labour.
Oh, and profit for global agribusinesses. Remember the food crisis in 2008 that saw food riots in many countries? The Wall Street Journal reported that in the midst of the crisis, "grain-processing giant Archer-Daniels-Midland Co. said its fiscal third-quarter profits jumped 42%...Monsanto saw its profit in the latest quarter more than double...Cargill Inc.'s profits jumped 86% to $1 billion in the latest quarter...Bunge Ltd.'s earnings rose about 20-fold to $289 million."