What the proposed 20% cut in farm subsidies mean for your grocery bill
Further, even if the Trump budget cuts were to increase market prices for crops and livestock, the effects on prices paid by consumers for their groceries would be modest.
The reason: most of the costs of putting food on supermarket shelves come from transportation, processing, and marketing expenditures. For example, payments to farmers for wheat account only for about 6% of the cost of a loaf of bread. Even relatively large increases in wheat prices would translate into modest increases in the price of a loaf of bread. So hypothetically, even if the Trump agricultural subsidy cuts were to increase agricultural commodity prices (which they wouldn’t), the effects on the food bills of U.S. consumers would be very modest.
What would the Trump budget cuts achieve? They would save taxpayers about $48 billion over the next 10 years and reduce U.S. farm-sector revenue by about 1%, scarcely an event that would cause the sector to collapse.
It would have negligible effects on food prices and food security.
Moreover, the impacts of the proposed cuts would be concentrated among the largest corporate farm operations and would have no impacts on the rural working poor and low-income farmers.