Where Do Americans’ Food Dollars Go?

The Lempert Report
July 11, 2019

A lot of money went to food services.

According to the USDA, in 2017, consumers in the United States spent $1.2 trillion on U.S.-produced food. Nearly all food starts out on a farm, but you’ll be surprised to see just how little of that food dollar goes to the farmer.

Of the $1.2 trillion in 2017 food spending, the largest cost share of the food dollar went to foodservices (restaurants) at 36.7 percent – this pays for others to host, prepare, and serve our meals, then clean-up afterwards. The next largest share, at 15 percent, went to food processors, such as bakeries, meat and dairy processors, and frozen food manufacturers. Rounding out the top five industry groups are food retailers (12.6 percent), wholesalers of both food products and production inputs (9.1 percent), and farm producers (7.8 percent). The farm producer’s share is what they receive after they pay for production inputs like seed, fertilizer, and electricity.

For the fourth year in a row, 2017 saw no increase in the farm production cost share of the food dollar. But unlike in 2015-16 when the cost of farm production in the food dollar dropped sharply, average prices received by U.S. farmers actually went up in 2017. Increases in eating-out spending by consumers actually offset the likely increase in the farm production cost share, as more money went to food services.