Commodity Costs Account For Less Than A Fifth Of The Food Marketing Dollar

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March 10, 2011

Commodity Costs Account For Less Than A Fifth Of The Food Marketing Dollar

Commodity prices are on the rise with animal feed prices nearly double 2010 levels along with coffee beans, and dairy product prices up as well. But The Food Institute points out that new government data shows that the so-called farm share of food marketed in the U.S. is just 16%. In other words, only 16 cents of each food marketing dollar came from commodity or farm costs in 2008. For many years, USDA’s Economic Research Service has analyzed annual spending by U.S. consumers on domestically produced food. ERS has published findings from this analysis in a series known as the marketing bill, which identified the costs of marketing the raw farm commodities contained in a typical dollar’s worth of U.S.-produced food and the share of the typical food dollar going to farmers.

Commodity prices are on the rise with animal feed prices nearly double 2010 levels along with coffee beans, and dairy product prices up as well. But The Food Institute points out that new government data shows that the so-called farm share of food marketed in the U.S. is just 16%. In other words, only 16 cents of each food marketing dollar came from commodity or farm costs in 2008. For many years, USDA’s Economic Research Service has analyzed annual spending by U.S. consumers on domestically produced food. ERS has published findings from this analysis in a series known as the marketing bill, which identified the costs of marketing the raw farm commodities contained in a typical dollar’s worth of U.S.-produced food and the share of the typical food dollar going to farmers. 

That 16 cents of each food marketing dollar is actually down from the prior analysis in 2006 when USDA reported the farm share at 20%. 
And what other changes has USDA found?

Payments from each food dollar going to the energy industry group approached seven cents in 2008, an increase of 75 percent since 1998. 

U.S. worker salaries and benefits coming from each food dollar steadily declined from 55 cents to 51 cents between 2001 and 2008.

Imported ingredients, both food and nonfood, accounted for a growing share of the food dollar, climbing from less than 5 cents in 1993 to nearly 8 cents in 2008.

To provide even more information about food supply chains, each of the three primary series into food at-home and food-away-from-home series and into total food expenditures that do not include soft drinks and alcoholic beverages and total food expenditures that include them. Interestingly, in the food-at-home marketing bill series, the farm share of the food dollar remained around 24 cents from 1993 to 2008, suggesting that increasing expenditures on food services are behind much of the reduction in the farm share in the total marketing bill series.