The "Middleman": A Major Source of Controversy in the Food Industry

Abstract

This article shows that (i) changes in the portion of retail food costs received by farmers largely result from farm product supply fluctuations that cause changes in the prices of farm commodities rather than from changes in the middleman’s share; (ii) changes in the middleman’s receipts (gross receipts less the costs of farm products) essentially result from inflation; (iii) changes in farm product prices and inflation are the two primary causes of changes in retail food prices; and (iv) retail food prices reflect farm product price changes only after a time lag and that the existence of this lag may account for much of the criticism of the middleman.