Does anyone know how much of the cost of a loaf of bread actually goes to the farmer? In other words, how much does the price of the wheat flour contribute to the overall price?

Same questions for the price of boxed cereals.

I'm just amazed that often we pay more for a box of cereal, or a couple loaves of bread, than the farmer is getting for a entire BUSHEL of wheat (or corn, rice, etc.)!

Thanks for your info! DAG

Less than a nickel. but less than amazing is where that money DOES go:

taxes on: the farmer, the manufacturer of the bread, the plastic clip, the bag, the advertising, the supermarket, the gas for transporting, the employees....

wages of the manufacturers of those items

wages on the transportation

the maintenance of the equipment

sanitation

OSHA

advertising, printing and packaging

materials & waste

etc etc etc....

I know - what's all this got to do with the cost of rice in China?

Mr(yeast inflection)Sensitive

Of course you always have the option of buying the wheat directly from the farmer and processing and making the bread yourself. Then you can pay him what you feel is a just price. Don't forget to add in the cost of the processing equipment you will need to invest in as well as gas to go to the source of the wheat, oven, electricity, the value of your time involved in making bread from scratch, other ingredients involved (yeast, shortening, etc.), etc. etc. etc.

You're really talking about apples and oranges when you try to compare the retail price of a loaf of bread with the wholesale and bulk cost of wheat.

1) Here are some things that affect the price of a loaf of bread at Safeway or Albertsons or Food Lion (the retailer):

Wholesale cost of the bread itself
Delivery charge from the wholesaler (if any)
Overhead to run the grocery store (these costs shared with every other item in the store, and only a portion can be applied to the bread):
--Labor (stockers, checkers, janitors, management)
--Labor taxes
--Utilities (heat for the store, phone service)
--Equipment costs (shelves, cash registers, etc.)

Overhead is usually worth only a few pennies on the total cost because it's shared by every retail product in the store. If the bread company delivers the bread, stocks the shelves, conducts the inventory and places the next order without the help of store personnel, some of the overhead may not be caluculated in at all.

2) Here are some things that affect the wholesale price of the bread from the bakery where it originates:

Wholesale cost of the flour
Delivery charge from the wholesaler (if any)
Overhead to run the bakery:
--Labor (bakers, delivery drivers, janitors, managers)
--Labor taxes
--Vehicles, vehicle maintenance and fuel
--Utilities (heat for the store, phone service)
--Equipment costs (ovens, utensils, proof boxes, etc.)

The bakeries usually run their own retail outlet, and the profits may contribute to covering the overhead of the bakery.

(You get the picture...)

3) Now you have to consider where the bakery gets its flour, that company's overhead, costs and desire for profits.

4) By the time you've traced the product all the way back to the farmer, the business has changed altogether, and what portions the farmer may get have little meaning. The wheat is sold for a host of different products in several industries, and flour itself is mixed in hundreds of different ways, bread being the end product of only some of them.

You may be looking at it from the wrong perspective. The farmer actually controls the price of a loaf of bread. He must find a way to cover his own costs: storage, labor for planting and harvesting, his own equipment, land maintenance and irrigation, etc.

The flour manufacturer has no choice but to cover the wholesale price of wheat (set by the farmer) by increasing their sales price of the finished product, flour.

The baker has no choice but to cover the cost of the flour (set by the flour manufacturer), along with all their overhead, with their wholesale price for a loaf of bread.

The retailer, Safeway, has no choice but to cover the cost of the bread (set by the baker) in their retail price.

Bread machines are great! Don't figure on saving any money though. Just those little yeast packets are expensive. The bread is great though!

The way farming operations have become, the family farm is practically a thing of the past. Farm operations are continually getting bigger. Farm equipment keeps getting bigger as well as more expensive. Its about like anything else. The farmers have to produce on large volume to make any money. Then many farmers get government subsidies as well. Some may wonder about that aspect. However when you think about it, this industry is very dependent on the weather. We might actually be better off giving them a helping hand as opposed to seeing many farmers going under.