As the holiday season approaches, Americans are preparing to spend big on baking ingredients. For example, butter consumption rose 16% last November and December compared to the rest of 2023, according to USDA data. Americans ate an average of 6.5 pounds of butter last year, a number that continues to rise.
Prices of staple foods such as flour, sugar and milk have been rising steadily for the past five years, as have the prices of many grocery items. CBS News Price TrackerEgg prices have risen 160% since 2019 due to shortages linked to multiple outbreaks of bird flu. Butter is 29% more expensive, which is in line with increases in all grocery prices over the same period.
Yet those who produce milk, which is used in baking ingredients, say rising prices don't always benefit them.
“Spiritually rewarding, not always financially”
Nate Chittenden starts his day caring for nearly a thousand cows at his family's dairy farm, Dutch Hollow, in New York's Hudson Valley. His herd of Jersey cows, known for high-fat milk that goes into products like cheese, butter and ice cream, requires around-the-clock maintenance to stay healthy and maximize productivity.
Chittenden, who runs the farm with his brothers and extended family, is able to pool resources with other farms as part of the Cabot Creamery co-op. Still, it can be a tough business.
“Working on a farm every day, you get an appreciation for taking care of animals, taking care of another living being, working with the land, just realizing that it all goes into making food,” Chittenden said. that provides to the people.” “It's beneficial spiritually, not always financially.”
How is milk priced?
Farmers often sell milk at a federally mandated price to producers who process it into liquid milk, butter, cheese or other dairy products. About 15 cents of every retail dollar goes to farms, and the government sets the price from farms to keep things fair.
“When you spend a dollar [at the store]”85 cents of it goes beyond the farm,” said Michael Swanson, an agricultural economist at Wells Fargo's Agri-Food Institute. The other 15% goes to processors who turn the milk into consumer products, and the rest to wholesale sales, advertising and other is spent.” Cost.
“Milk doesn't stay good for very long. You have to eat it, sell it that day or get rid of it. So [the government] This wants to make sure that everyone who ships milk to a processor buyer in the district gets the same price back,” Swanson explained.
Farmers simply cannot charge more money for their product if they increase their expenses, and many cite increased animal feed and labor costs as an impact on their margins.
“It's a struggle every year,” Chittenden said. “We're one big mistake away from going bankrupt.”
hope for the future
Swanson said the situation may change for some farmers. Retail dairy prices to consumers have remained stable over the past several months, although they remain higher than 2019 levels. Other major expenses are also falling, with the benefits of last year's lower feed costs now being passed on to farmers.
“Dairies actually have 10% more revenue this year, year over year, than they will in 2023,” Swanson said. Although labor is “never cheap,” he said many farmers could be poised for a strong 2025. “They're in a much better position right now than they were a year ago at the beginning of December,” Swanson said.
Yet, for small family farms like Chittenden, every day is a challenge – one that requires patience and determination to move forward.
“No matter how hard our day is, you get to the end of the day, you get home with your family and say, we'll do better tomorrow,” Chittenden said. “You know, I don't need a pat on the back for doing this job, but I need people to understand what it takes to do this job.”