Every year, the USDA calculates consumer expenditures on food, both at home and away from home (e.g., fast food), which totaled over $1.1 trillion in 2008. They also estimate how much of every dollar spent goes to farmers (“farm value”) and the food marketing system (“marketing bill”).
The marketing bill, according to the USDA, “provides a composite estimate of the value added to agricultural products by the food marketing system for all types of food, including both at-home and away-from-home foods.” In other words, it is the amount of every dollar US consumers spend on food that does not go to farms, and is used to pay for labor, packaging, transportation, energy, miscellaneous, and corporate profits of “food marketing system” participants (USDA data table). For more information on what makes up the food marketing system, check out the USDA’s “The U.S. Food Marketing System: Recent Developments, 1997-2006” report.
The farm value “is the value of the farm products equivalent to foods purchased by or for consumers at the point of sale by farmers.” Combining the marketing bill and farm value equals consumer food expenditures. OK so far? Pretty straighforward, so let’s focus on one key data point that has been keeping me up at night:
Farm value has declined from 31 percent of every dollar spent by consumers in 1980 t0 19 percent in 2008, representing a 40 percent decrease in revenue flowing to farmers.
Making up the difference is the food marketing system, which divided its newly acquired 12 cents on the dollar between:
- Labor – 126% increase
- Misc – 123% increase (includes advertising and promtion)
- Corporate profits – 120%
- Energy – 112% (fuel and electricity)
So, how does the USDA explain this significant shift of who gets how much of the pie?
“The farm value share has declined over the years due to large supplies of farm products holding down farm prices while increased expenditures for food marketing services have caused retail food expenditures to rise.”
I am assuming that the “large supplies of farm products” are really the 4-5 monoculture crops, not specialty vegetable crops (e.g., tomatoes, beans, lettuce, etc.), since so much of the fruits and vegetables we eat are currently imported. According to a recent New York Times article, the four largest monoculture crops are expected to cover approximately 228 million acres in the US (corn-85 million, soybean-76 million, wheat-59 million, cotton-9 million), which is more than two-and-a-half times the 85 million acres in our National Parks and just over 51 percent of all US croplands.
As corn and soybean crops are major contributors to the manufacturing of low-cost sweeteners (e.g. high fructose corn syrup) and oils used in the highly-processed foods dominating supermarkets and fast-food establishments, is it any surprise that 12 cents on the dollar shifted to industrial food companies in the last 25-30 years? Probably not. But, did you know the specifics of how much so before reading this?
Regardless, I hope you will help me in educating more people about yet another significant and very real challenge our smaller farmers face in growing diverse crops. This challenge joins what seems to be an ever growing list.
Related Information and Links:
- Industrial Food Continuing to Stack Deck?
- Supporter of Food Renegade’s Fight Back Fridays
- Follow me on Twitter: Jambutter