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Published on 01/12/00

Modest Food Price Increases Still Hard For Georgia's Poor

While many Georgians celebrate the news of low increases in food prices, some Georgians will still struggle.

University of Georgia experts with the College of Agricultural and Environmental Sciences forecasted this week that food prices will rise only 2 to 2.5 percent this year. While that's good news for most consumers, for farmers and low-income Georgians the news isn't so good.

The low increase is greatly due to surplus supplies of food, which lowers prices for farmers, but not for consumers.

"Food prices would be more effected by farm prices if consumers wanted more fresh food," said Bill Thomas, an agricultural economist with the UGA College of Agricultural and Environmental Sciences. "But people no longer want fresh produce. They want it cut up, seasoned, freeze-dried, pre-packaged and ready to cook. That costs more money."

Farmers only make 23 cents of each dollar charged for food. "The rest," Thomas said, "goes toward paying for advertising, packaging, transportation, labor and other preparation costs."

Georgia farmers are facing low prices for commodities ranging from corn to cotton.

"We are facing poor yields and the lowest prices in 20 years for cotton," Thomas said. "We have record supplies worldwide for corn, so we are seeing low prices."

Peanuts growers aren't seeing any premiums for their products, and are getting only average program prices.

The U.S., as well as Brazil, has record crops in soybean, keeping prices low.

"The midwest enjoyed good weather and record yields, while we were hit with the drought and bad yields, sticking us with low prices," Thomas said.

While the food price increases may seem low to most Georgians, for many low-income Georgians and those who depend on shrinking federal help, they can be a strain on household budgets.

"Any price fluctuation affects the poor more significantly than any other group," said Bill Bolling, executive director of the Atlanta Community Food Bank. "For those who are having a difficult time paying rent, buying food and caring for their children, even a slight increase makes it even more difficult."

Household income also has an impact on what is spent on food.

"Our latest figures show that a family whose income is between $5,000 and $9,999 per year will spend about $2,389 on food. That's 32 percent of their income," Thomas said. Families earning $30,000 to $39,999 spend more,$4,710, on food but that is just 14.7 percent of their income.

Faith Peppers is the director of public affairs with the University of Georgia College of Agricultural and Environmental Sciences.

Experts/Sources:
Bill Thomas
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