Aug. 25, 2022
– While consumers are seeing higher prices at the grocery store, the men and women who are producing, processing and transporting the food are being hit even harder by inflation, members of the House Majority Policy Committee were told Wednesday at a hearing in Brownstown, Lancaster County.
Rep. Keith Greiner (R-Lancaster) hosted the hearing, which featured testimony from a half dozen people involved in various aspects of the agriculture industry.
“Food production is so vital in our day-to-day lives, but people don’t always think about where our food is coming from – who’s growing it, who’s processing it and who’s delivering it,” Greiner said. “Inflation is putting a major strain on the people who are essentially feeding us. I am so grateful for the work they are doing and want to ensure we are doing whatever we can from a policy perspective to help ease the burden of inflation, both on them and on consumers.”
While the testifiers came from different segments of the agriculture industry, all are being impacted in similar ways by the skyrocketing costs of supplies, fuel, labor and equipment.
Bill Beam, president and owner of Beam Farms Inc. in Elverson, Chester County, cited the skyrocketing costs of his crop inputs, including a near 100% increase in the price of nitrogen from $320 per ton in 2021 peak season to $625 per ton in 2022 peak season. Similarly, products applied to maintain phosphorous levels have increased by 50% over last year and potash by 87%.
“When they talk about inflation of 8% or 12%, you can see it doesn’t even come close to what we’re experiencing,” he said.
Chris Pierce, president of Heritage Poultry Management Services in Lebanon County, said energy costs are a major factor impacting the poultry farms he works with. He believes the United States must do more to build energy independence.
“We need to produce the energy here today to make it more affordable and more attainable,” he said.
On top of the high cost of fuel, the cost of parts and equipment is also up substantially, according to Daniel Good, former CEO of Good Transport Services.
“New truck pricing is up almost 16%. The same truck a year ago now costs $37,000 more,” Good testified. “The cost of tires has risen 39%. The cost of brake drums has increased 25%. Even oil and filters are up more than 10%.”
Labor costs were another concern cited by several testifiers. “The final and probably largest impact of inflation on our business is the hiring and retention of skilled labor. The single greatest expense to our business is labor, and in the past year we have had to increase wages for our team by approximately 10%, said Mike Smucker, president of Smucker’s Meats.
Doug Taylor, founder and CEO of Taylor Chip Cookie, agreed finding workers to help his business keep up with demand is the biggest challenge he faces. “The first half of the year, our projections were, just about, cut in half. We struggled to find the staff needed to produce our cookies, which we ship nationwide. At some points, our fulfilment has been up to 3 weeks out due to not have the staff to keep up with demand,” he testified. “For us, this meant that we had to turn off advertising and actively stop trying to bring in new customers.”
Heather Lewis, who runs a family farm with her husband in Mount Joy, compared dealing with today’s inflation to a rachet strap. As costs for crop inputs, fuel and maintenance go up, the strap gets pulled tighter.
“Yes, ratchet straps can get tight and uncomfortable, but they also provide safety and security,” she said. “So things are tight right now, but we’ve gone through hard before and come out stronger than before. We will do it again.”
Wednesday’s hearing was the fifth one held by the committee to look at various aspects of inflation on business and consumers.
“We’ve heard a number of common themes throughout these hearings, including labor and regulatory costs, but it always seems to come back to energy being at the root of the problem,” said Rep. Martin Causer (R-Cameron/McKean/Potter), chairman of the committee. “We have the resources to generate more of our energy here at home and that should be a top priority.”
To view the hearing or read submitted testimony, visit pagoppolicy.com
Representative Keith Greiner
Pennsylvania House of Representatives
Media Contact: Alison Haas